Loading
The battle between banks and credit unions, usually top-of-mind for area community bankers and credit union executives, has escalated.
The latest salvo: The American Bankers Association sued federal regulators to stop what bankers say is an unfair expansion of where credit unions can draw new customers. Bankers have long protested the tax-exempt status of credit unions and charge the new rule violates conditions under which Congress granted the tax exemption.
The National Credit Union Administration, NCUA, drew the banker association's ire by approving a new rule that gives credit unions a field of at least 10 million more potential new members. The rule particularly provides a way for credit unions to expand membership rolls faster in big cities. The NCUA is a federal agency, the credit union industry's version of the Federal Deposit Insurance Corp.
In its lawsuit, filed earlier this month in the U.S. District Court for the District of Columbia, the ABA says the credit union's agency exceeded congressionally set limits on credit union memberships. “The rule disregards Congress' explicit instruction that community credit unions serve only a single, well-defined local community,” the bankers association says in a statement on the lawsuit.
The National Credit Union Administration recently filed a motion to dismiss the lawsuit. A hearing on that motion is expected to be held early next year.
Your free article limit has been reached this month.
Subscribe now for unlimited digital access to our award-winning business news.
Join thousands of executives who rely on us for insights spanning Tampa Bay to Naples.
