The NCUA (National Credit Union Association) released an opinion letter preempting state law stating that Wisconsin credit unions can use the word “bank” in certain circumstances despite Wisconsin law dictating the opposite. WBA responded swiftly with a press statement sent to state and national media and also contacted the Wisconsin Department of Financial Institutions (DFI) regarding its position on this controversial letter. WBA is also emailing our Congressional Delegation to inform them of this overreach and ask them for tax and regulatory parity. It’s past time to get rid of the “cheerleader” status of the NCUA.
First, a little background. Recently, three Wisconsin credit unions were issued cease-and-desist letters from DFI regarding their use of the word “bank.” The Wisconsin Credit Union League (WCUL) asked for clarification from the NCUA on this issue.
On May 11, the NCUA issued an opinion letter in response to that clarification request claiming that both Wisconsin’s banking law and Wisconsin’s Deceptive Trade Practices Act are preempted by NCUA’s advertising rule.
WBA vehemently disagrees that NCUA has the authority to issue this preemption letter affecting state-chartered institutions. Moreover, the analysis in the letter used to issue its interpretation is flawed. One of the more ludicrous arguments made in the letter was that credit union’s inability to use “bank” in their advertising efforts would jeopardize the safety and soundness of their institutions.
NCUA also used the phrase “level playing field”—ironic, considering the source.
WBA’s press statement has been covered by two national publications. We are waiting for information from DFI as to its position regarding this issue.
An email to Wisconsin’s Congressional Delegation will be on its way shortly. Additionally, Wisconsin legislators will also be informed of this overreach by NCUA.
Watch for future WBA emails as more information becomes available. For more detailed information on this opinion letter and other items referenced above, please review the links listed below.
NCUA Opinion Letter
WBA Press Statement
Wisconsin ‘bank’ battle: Credit unions, bankers spar over NCUA ruling (Credit Union Journal)
Wisconsin State Charters OK’d To Continue To Offer ‘Banking’ Services (CUToday)