Gadfly Moon by Holiday Mathis


Credit unions and banks, long at odds over the differing regulations they face, renewed sparring Wednesday over several bills that industry leaders on either side claim gives the other an unfair advantage.

A range of legislation is pending before the Joint Committee on Financial Services that would implement changes to how credit unions operate, such as a new prohibition on deposits from nonauthorized patrons or permission to offer real estate loans outside their geographic area.

Executives from several credit unions and members of the Massachusetts Bankers Association both testified at the committee’s hearing, each highlighting different details they view as concern, but reaching similar conclusions: the language in question would boost one side at the other’s expense.

One bill (H 1065), filed by Rep. Frank Moran, drew sharply differing reviews. It would bar credit unions from taking deposits from most nonmembers and from making some large business loans, and it would also require credit unions that seek to change the bylaws governing their membership to secure votes only at annual meetings rather than special meetings, which can be scheduled more promptly.

The Massachusetts Bankers Association has been working on the legislation for several sessions, and John Skarin, the organization’s executive vice president, said the latest refined version is a viable compromise.

“This bill, we think, strikes a balance between some of the overreaching provisions we had in the original bill and some things this committee might find favorable this session,” Skarin said.

Credit union executives disagreed, slamming the proposal as a clear effort by the banking industry to hamstring competitors.

“This bill is a simple attempt to publicly discredit local credit unions, increase the regulatory burden, and claim an even larger share of the marketplace for banks,” said Ron McLean, president and CEO of the Cooperative Credit Union Association.

Tensions also flared over other bills backed by credit unions. One proposal (S 575 / H 1034) would close regulatory gaps amid a changing landscape and allow mutual banks and credit unions to merge — with the charter remaining in the name of the union — as a way to manage pressure from larger national and international banks.

The bill would further expand credit unions’ ability to purchase or participate in loans, something that industry leaders say is currently difficult to do.



Source link