It is normal and perfectly acceptable that credit unions should evolve, CUNA President/CEO Jim Nussle wrote to Sen. Orrin Hatch (R-Utah). Nussle responded to a letter Hatch sent NCUA Chair J. Mark McWatters last week with questions about the state of the credit union movement.
“It is perfectly acceptable for credit unions to evolve – the whole financial services industry looks different than it did in 1934,” Nussle wrote. “Credit unions need to remain relevant to consumers in order to fulfill their mission, and they’re working to remain relevant within a charter that is overly restrictive and burdensome.”
Nussle detailed the background behind credit unions’ tax status, and how that mission has not changed. He noted that credit unions’ expanding their product offerings reflects ongoing change in technology and the financial services marketplace.
In the letter, Nussle also noted:
- Credit union sponsorship of all levels reflects a need for credit unions to increase awareness as part of their mission. A voter survey showed 27% of Americans were unaware they were eligible to join a credit union, making public awareness of safe and affordable credit union products essential;
- NCUA staff works with credit unions during development proposals to change fields of membership, which is like why rejections of community charter applications are low;
- Despite incremental changes by NCUA to the list of permissible credit union activities, the Federal Credit Union Act has not been modernized comprehensively in more than 80 years, while banks were granted sweeping new authority in 1999; and
- Credit union purchases of banks are done with strict regulatory oversight, and help the banking system by limiting losses from the bank’s deposit insurance fund. These purchases are often the best way to ensure uninterrupted financial services in local communities.