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Bankers Group Says Credit Unions Should Face Same Regulations

October 27, 1994|From Associated Press

IRVING, Tex. — A group of community bankers on Wednesday proposed taxing credit unions and bringing them under the same federal laws as banks, saying that would even the competition between the two.

The Independent Bankers Assn. of America said most credit unions provide the same services as commercial banks and should be regulated like them.

"It's high time that credit unions faced the same (fair-lending) rules, capital standards and tax requirements as banks," said John Shivers, a Ft. Worth banker and president of the association.

Credit unions dismissed the plan as a sour-grapes effort to weaken the competition. Credit unions currently do not have to pay federal taxes because they are technically nonprofit institutions owned by their members.

The bankers association, which represents 6,000 small banks, proposed legislation titled "The Credit Union Reform and Regulatory Improvement Act of 1995." The seven-part plan would impose taxes on credit unions with more than $10 million in assets, allow the unions to offer services to people linked to only one employer or organization, and subject unions to capital standards similar to those for banks.

The proposal would also apply the Community Reinvestment Act to credit unions, a move already advocated by some activists, lawmakers and regulators. (The act is a fair-lending law intended to keep banks from discriminating against the poor and minorities.)

The bankers group said it does not yet have a congressional sponsor, but expects to have one after the November elections.

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