American Banker, September 4, 2015
National Credit Union Administration officials will likely reflect on 2015 as the year they were inundated by comment letters. The agency received nearly 2,200 letters last spring tied to a revised draft of its proposed risk-based capital regulation. That total was believed to be a record — but it didn’t stand for long.
The NCUA, which oversees the credit union industry’s share insurance fund and serves as primary regulator for federal credit unions, reported Thursday that a proposed overhaul of its rule governing member business lending had generated a whopping 3,088 responses.
“A great majority” of the letters oppose the agency’s plans to ease restrictions on business lending, a spokesman said.
The American Bankers Association and the Independent Community Bankers of America also submitted sharply worded letters blasting any expansion of member business lending and launched aggressive lobbying drives aimed at making banks’ opposition clear.
“ABA has been pushing this issue hard,” spokesman John Hall wrote Thursday in an email to American Banker. The association “put out multiple appeals to our members to articulate their concerns directly to NCUA.”
The bad blood between banks and credit unions is hardly a new phenomenon, and credit unions and their backers have also been vocal. In an Aug. 12 comment letter, Stacey Mitchell, writing on behalf of Advocates for Independent Business, a two-year-old trade group that represents florists, booksellers, bicycle dealers and other independently owned retailers, said that more business lending was badly needed to counteract a credit shortage.
Mitchell acknowledged in an interview Friday that community banks provide the lion’s share of credit for small businesses, but she said mom-and-pop retailers still face an acute shortage of small-dollar credit, especially loans for less than $100,000. “The local bookstore that wants to add inventory, and the small coffee shop that wants to open a new location,” are being squeezed, she said.
The NCUA made the draft of its member business lending proposal public on June 18. The comment period for letters closed on Aug. 18. A final vote on the issue is expected sometime this fall.