The nation’s biggest bank lobby sent Democratic leaders a letter Friday lashing out at credit unions for seeking to expand their lending authority to improve the economy.
In a lengthy letter to Speaker Nancy Pelosi (D-Calif.) and House Education and Labor Committee Chairman George Miller (D-Calif.), the American Bankers Association (ABA) urged lawmakers not to increase the amount of money credit unions may lend.
The bank lobby’s effort comes after Rep. Paul Kanjorski (D-Pa.) urged Pelosi and House leaders to raise the business lending cap for credit union members from 12.25 percent to 25 percent.
Kanjorski argued an increase would lead credit unions to lend more to small businesses and create as many as 100,000 jobs. Kanjorski personally appealed for the change with President Barack ObamaBarack ObamaFive things to watch in France's election Ex-Obama aide Rhodes: Le Pen victory in France would be 'devastating' Sanders to Trump: 'Listen to the scientists' MORE on Air Force One as the president visited Allentown, Pa.
The bank lobbies said the change “will only increase the risk exposure of credit unions” and “result in credit unions straying further from their traditional mission of serving customers, particularly those of modest means.”
Credit unions and banks have fought a lengthy battle over the issue.
Credit union lobbying groups immediately shot back, saying banks have failed to increase lending to small business attempting to weather the bleak economy.
“I continue to find it interesting that the ABA and the cabal of state banking organizations continue to focus on credit unions while the [Federal Deposit Insurance Corporation] continues to take over a record number of banks,” said Dan Berger, executive vice president at the National Association of Federal Credit Unions (NAFCU). “Like my grandfather used to say … those in glass houses.”
Dan Mica, president of the Credit Union National Association, said bankers are doing a "grave disservice" by lobbying against the change.
“As they have too often throughout the nation’s financial crisis, the bankers are thinking only of themselves at a time when small businesses are in dire need of access to credit," Mica said in a statement.