WASHINGTON-The same day credit unions and banks were testifying before the Senate Banking Committee on regulatory relief and as CUNA's Governmental Affairs Conference wound down, the three major national banking trade associations took the opportunity to remind Congress of their opposition to the Credit Union Regulatory Improvements Act (H.R. 2317). In a joint letter, the American Bankers Association, America's Community Bankers, and the Independent Community Bankers of America wrote, "Disguised as a regulatory relief bill, H.R. 2317, the Credit Union Regulatory Improvements Act of 2005 would allow tax-exempt credit unions to expand into full-blown commercial lending while lowering their minimum capital standards. It's important not to forget that credit unions were granted special tax-subsidized status to serve people of modest means, not finance commercial enterprises." "We are urging Congress to forego granting tax-exempt credit unions even more authority to make business loans, when they fail to show how they fulfill the very mission for which they were established – serving the underserved," the banking trades said. "Congress already spoke on this issue when lawmakers put in place limits on business lending and excessive risk-taking by tax-exempt credit unions." According to ABA, ACB, and ICBA, CURIA would "exacerbate the inequities fueling the aggressive expansion of complex credit unions, while putting both smaller credit unions and tax-paying financial institutions at a greater competitive disadvantage." The bankers pointed to the November Ways and Means Committee hearing and asked, "Why would Congress want to grant credit unions even more authority to make business loans, when they are not fulfilling the very mission for which they were established – serving the underserved?" (original emphasis) At the same time, NAFCU President and CEO Fred Becker was extending an olive branch for the two sides to work together to pass regulatory relief. In a letter to the leaders of the three groups, he wrote: "We know that the regulatory burden that all our members face in today's environment presents ever more difficult challenges to our members as costs of compliance continue to grow. Following today's Regulatory Relief hearing before the Senate Banking Committee, I would urge that we, as leaders of the financial services industry, join together to ensure the passage of the Regulatory Relief Bill during this session of Congress. I hope that you will agree that in so doing, we have a tremendous opportunity to not only reduce compliance costs and gain much needed relief from the regulatory burdens our members face on a daily basis but, most importantly, to strengthen the safety and soundness of our industry." He also congratulated the bankers on announcing their fifth straight year of record profits. Copies of the letter were also sent to CUNA and NASCUS. In response to the bankers' letter, CUNA said they were "clearly" responding to the group drawing so many credit union leaders to its GAC last week. "The irony of the bankers' joint letter opposing congressional support for CURIA is that it maintains that the legislation would place "tax-paying financial institutions at a greater competitive disadvantage." This specious claim is made the day after banks have announced their most profitable year ever (with $134.2 billion in profits)," CUNA said. "On top of that, the so-called "community banks" themselves have identified other community banks as their greatest competitive threat." -

[email protected]