February 29, 2024

Bill In Missouri General Assembly Levels Playing Field Between Banks, Credit Unions

In Washington, bankers call for hearing on credit unions

Legislation was filed today in the Missouri House of Representatives that would help level the playing field between banks and credit unions in the state. 

House Bill 2886, sponsored by Rep. Dane Diehl, R-Butler, would impose fair lending requirements on state-chartered credit unions similar to the Community Reinvestment Act, which banks must follow. MBA fully supports this measure.

“This long-overdue change to state law ensures credit unions are adhering to their mission and lending across the communities they serve,” said MBA President and CEO Jackson Hataway. “Given the continued efforts by credit unions to expand their field of membership and the allegations of discrimination against Navy Federal Credit Union, the time is right to ensure credit unions are truly serving their members to the best of their ability and playing by the same rules as banks.”

Aspreviously shared by MBA, recent media reports found that Navy Federal Credit Union had turned down large volumes of mortgage applications from Black applicants. U.S. Congressman Emanuel Cleaver is leading efforts with the House Financial Services Committee and Congressional Black Caucus demanding answers from the credit union.

On Wednesday, MBA joined the American Bankers Association and state bankers associations in urging lawmakers in the U.S. House and U.S. Senate to hold a hearing to determine whether the credit union industry’s tax exemption is justified by the community benefit it produces. In a letter to the leaders of the House Ways and Means Committee and Senate Finance Committee, the groups said that credit unions have strayed from their original mission as nonprofits designed to provide consumer financial services to those in need. Instead, they acquire banks, issue subordinated debt and offer nationwide membership.

The letter noted that it has been two decades since Congress last held a hearing on the credit union tax exemption. MBA urges bankers to contact their U.S. senators and representatives to convene an oversight hearing on credit unions.

MBA Priority Bill Gains Momentum In Senate

MBA-priority legislation to increase the cap on the state’s MOBUCK$ program took a major step in the Missouri Senate this week. Senators gave first round approval to Senate Bill 736 on Tuesday. The bill, sponsored by Sen. Sandy Crawford, R-Buffalo, would increase the amount the state treasurer can invest in the program from $800 million to $1.2 billion. It now heads to the Senate Fiscal Review Committee and, if approved, will return to the Senate floor for a final vote.

“This legislation is making great progress in the General Assembly,” said MBA Senior Vice President David Kent. “We thank our members for speaking with their lawmakers about the importance of this bill and the benefits it provides to Missouri’s small businesses and ag producers.”

The House companion bill was approved by representatives last week and sent to the Senate.

Make Your Voice Heard at NextGen Day at the State Capitol

MBA welcomes members of its Next Generation in Banking division to participate in NextGen’s Day at the Capitol on Tuesday, March 5.

“This is your opportunity to have your voice heard by state lawmakers as you take part in MBA's state advocacy efforts,” said MBA Vice President Emily Lewis.

NextGen Day at the Capitol is a key component of MBA’s Target Banker program. Through Target Banker visits, MBA has a continuous presence at the Capitol throughout the session.

“Target Banker visits provide an opportunity to learn about the legislative process, get to know your lawmakers and have your voice heard as you take part in MBA’s state advocacy efforts,” Lewis said. “The more bankers participate, the more it amplifies our message to lawmakers.”

This session, the credit union association has again filed legislation in the Missouri Senate and Missouri House of Representatives to expand their field of membership. Their bills would allow a single credit union to access nearly the entire state. The largest credit unions could further expand and increase their business lending to compete more directly with banks.

“Credit union employees and members have been in the Capitol every week telling lawmakers that banks oppose these bills because they are afraid of competition,” Lewis said. “Bankers need to fight back and educate their legislators on the unlevel playing field caused by the credit unions’ federal tax exemption and lighter regulatory burden.”

Bills to expand credit unions’ field of membership have not moved forward yet. However, it’s imperative that bankers connect with their state lawmakers — at home or in Jefferson City — to be sure they understand the implications of this bill that would give credit unions an even greater advantage when competing with banks.

In their meeting with lawmakers, MBA and its members also have been discussing the banking industry’s support for legislation that would increase the cap for the MOBUCK$ program from $800 million to $1.2 billion. The Senate has given first round approval to Senate Bill 736, and House Bill 1803 has received final approval from the House and been sent to the Senate for consideration.

MBA Accepting Applications for Banking Leadership Missouri

Bankers seeking to enhance their leadership abilities and knowledge of the banking industry are encouraged to apply for MBA’s 2024-25 Banking Leadership Missouri program. The 12-month program is designed specifically for bankers with broader responsibilities, those in a management role or bankers who have potential for senior management.

“Banking Leadership Missouri focuses on developing a solid understanding of the banking industry and the skills necessary for leadership that participants can put into practice immediately,” said Cheri Messerli, MBA senior vice president. “Many graduates of Banking Leadership Missouri now lead their banks in various capacities, including CEO, president, vice president, director and manager.”

The program begins in June 2024 and concludes June 2025. A maximum of 25 Missouri bankers will be selected to participate in the tenth class of Banking Leadership Missouri. Applications are due Friday, May 3.