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    Issue of Interest: Credit Unions

    ABA Media Contact: John Hall
    Phone: (202) 663-5473                                               
    Email:     jhall@aba.com                                                                  Last updated: March 22, 2012 

    The 1934 law establishing the federal credit union charter stated its purpose was "to make more available to people of small means credit for provident purposes through a national systemm of cooperative credit."

    Once, members of a credit union knew each other and pooled their resources to privide credit for their co-workers and/or neighbors. This common bond, the hallmark of the credit union industry, has been stretched beyond recognition.

    Today, many credit unions have grown into highly profitable, billion-dollar institutions offering a full range of financial services- including insurance and securities brokerage- to just about anyone. Though these institutions look and act like banks, they do not pay taxes or abide by the same rules as banks.

    The NCUA has steadily adopted policies that have expanded credity union membership beyond the limits prescribed by Congress. As credit union membership expands, so does the cost to American taxpayers, who underwrite the credit union industry's tax subsidy to the tune of more than $1 billion a year.

    ABA has challenged NCUA's policies through comment letters and in court and will continue to make the case that similar institutions ought to be treated similarly.

    Letters

    Testimony

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