ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release July 29, 2004 #04-38
E-mail: [email protected]

ACB OUTRAGED BY LATEST NCUA DECISION

Press Release Tools
	E-mail This Press Release
	Printer-Friendly Format

The following is a statement by ACB President & CEO Diane Casey-Landry on today’s decision by the NCUA’s Region V to approve the largest ever federal community charter:

Today’s decision by the NCUA Region V to approve a “community charter” for the LA Financial Credit Union that encompasses all of Los Angeles County and its population of 10.1 million people is an outrage. It reflects the great disdain that the NCUA has developed for any reasonable, rational regulation of large, complex credit unions. This is especially obvious since this incredible decision does not even require a review in Washington.

This outlandish decision should not just be of concern to community banks, but to small and midsize credit unions across the nation as well. If the NCUA has the audacity to create a “community charter” for 10.1 million people (more than 25% of California’s population and more people than reside in 42 of this nation’s 50 states) than can a “California Community or Nationwide Community Charter” be far behind?

Community banks and traditional credit unions play a critical role in our nation’s financial services system. But what is the socio-economic benefit of having a tax-exempt entity whose only requirement for membership is that one “lives, worships, works in, or attends school in, and businesses and other legal entities located” in Los Angeles County — the nation’s single most populous county?

This $300 million credit union, which now has the potential to serve more than 10 million people, has absolutely no obligation whatsoever under the Community Reinvestment Act, which requires all banks to invest in the communities they serve. Is that really what a so-called “community charter” is all about? We think not.

If credit unions want to play like banks, they should pay taxes like banks — especially if their community includes 10.1 million Americans.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

-30-