ST. LOUIS — Missouri credit unions can find comfort in the Missouri Credit Union Association (MCUA), an organization that works to protect the interests of credit unions throughout the state.
As of March 31, there are 131 credit unions, according to Amy McLard, Senior Vice President for Advocacy for the Association. Of those 131 credit unions, she said, 45 have less than $10 million in assets. That means there are many of the “little guys” for the MCUA to watch out for.
McLard said the MCUA is doing this in many ways, but with a few issues in particular — comprehensive tax reform, regulatory reform and member-business lending.
Because credit unions are non-for-profit financial cooperatives, McLard said, they do not pay the federal income tax on profits. Because of this, that money is returned back to members. A federal tax would make this harder if it was imposed on credit unions.
“We have a national effort on hand going with Facebook, Twitter and websites to make sure lawmakers recognize the important role credit unions play in the financial landscape and how much we serve working families and why that’s needed,” McLard said. “Because if credit unions would be taxed, it would be a tax on the people who use credit unions as well as the people who don’t because we benefit consumers.”
McLard said the MCUA is also working with lawmakers on the federal level “to try and implement regulatory changes” to ensure the livelihood of credit unions. She said when big banks got caught making big mistakes — such as the housing issues — credit unions had to deal with the aftermath.
“Smaller institutions, including credit unions, got swept up in a lot of the reform and the credit unions weren’t the ones who caused the problem to begin with,” McLard said.
She said credit unions now have to complete compliance requirements they didn’t have to before. Credit unions have to work with the Consumer Financial Protection Bureau, which can create a “big back pile of compliance work,” McLard said. The credit unions also have compliance officers now, she added
“Credit unions would rather be spending their time and their funds towards their members and they’re having to spend a lot of time and funds on having compliance officers and abiding with regulations that are in place,” McLard said.
The law limits credit union business lending at 12.25 percent of assets. The MCUA would like to see that rate rise to 27.5 percent of assets.
“Our philosophy is that it’s people’s money. They have the right to choose what financial institution they want to go for their business loan,” McLard said. “Shouldn’t they be able to go to the credit union they know and trust in order to see if they qualify for a business loan? With that in place, it is prohibitive.”
A recent success at the state level for the MCUA was the passing of House Bill 478 last session, she added. The bill “simplified the law,” McLard said, making certain processes at credit unions were streamlined in line with other financial institutions.
“It made sure there’s no confusion on how to handle a certain account or what way to proceed,” McLard said. “Because sometimes some things don’t get changed for one institution and they do for another.”