WASHINGTON–America’s Credit Unions is calling a new demand by a bankers’ group “hypocritical politics.”
As the CU Daily reported here the Independent Community Bankers of America is renewing its call for Congress and federal regulators to require federal credit unions to file IRS Form 990 information returns, arguing that greater transparency could have helped expose the alleged $95 million embezzlement scheme at Jackson Area Federal Credit Union sooner.
In a statement, ICBA said the ongoing scandal involving the Jackson, Miss.-based credit union, which is currently being operated under conservatorship by NCUA, underscores what it described as shortcomings in the oversight and transparency of tax-exempt credit unions.
“The sensational and deeply troubling news of a major embezzlement scheme at a credit union that enjoys taxpayer subsidies and regulatory advantages over tax-paying community banks demands a response from policymakers,” ICBA President and CEO Rebeca Ro mero Rainey said in the statement.
‘Spin’ and ‘Mischaracterization’
America’s Credit Unions has responded by saying the “isolated” incident should not be used against credit unions.
“The situation at Jackson Area Federal Credit Union is a serious breach of trust and reveals missed opportunities to identify and stop the former CEO’s abuse of access and power. We condemn this behavior, and unfortunately there are always bad actors in every sector of financial services, Kathleen Coulombe, chief advocacy officer with America’s Credit Unions, said in a statement. “What we are defending against, however, is community bankers’ efforts to spin this individual situation to mischaracterize the entire credit union movement. This is nothing more than opportunistic and hypocritical politics. Banks and their trade associations are not strangers to insider abuse, fraud, and executive misconduct; their own history is well-documented. To selectively highlight a failure at a credit union while ignoring the pervasive record of similar, and often far larger, scandals within the banking industry is not a principled concern for consumers. It is a competitive attack dressed up as outrage.
“Through every economic crisis, credit unions have proven they are safe, sound, and member-focused. We will not allow isolated bad actors to be weaponized against the millions of Americans who are better served by credit unions every single day, and we will call out the cynicism behind those who try,” Coulombe added.
The Details
The CU Daily has had extensive coverage (here and here) of the lawsuit against JAFCU and the alleged embezzlement of nearly $100 million to purchase luxury goods, homes, automobiles, private flights and more by the credit union’s former CEO and her husband.
