Credit union call reports are not sufficiently detailed, the American Bankers Association said, countering credit union arguments that they are too complex.
“Every federally insured banking institution is required to file a call report—different than that required by the credit union industry—containing reams of financial and non-financial information, making the banking industry an extremely transparent business, “ Brittany Kleinpaste, ABA’s director of economic and policy research, said in a letter to the NCUA earlier this month.
In June, the NCUA asked for credit unions to evaluate the entire exam process. The month before, NCUA Chairman Rick Metsger announced that the agency would be working on a call report modernization project. Kleinpaste’s letter was filed as part of that process.
As might be expected, credit union trade groups have a different opinion of call reports. In comments to the NCUA, the groups called the reports overly burdensome, confusing and require the reporting of questionable material. Contrary to the bankers’ positions, they called for simplification.
Banking calling reports are about 70 pages long and require financial institutions to report on nearly 2,000 items, Kleinpaste said.
The ABA called on the NCUA to require credit unions to file branch office deposit information, which it says would provide consumers more detailed information about how active credit unions are in their community and the stability of the institution.
The ABA said that all financial service businesses must file that information, with the exception of credit unions.
In addition, the ABA said that the NCUA should require credit unions to file detailed information about compliance with the Community Reinvestment Act. “Evidence shows that credit unions are doing a poor job at serving people of modest means,” the ABA said. The association cited a 2006 General Accounting Office report that it said shows that credit unions are more likely to serve middle-to-upper income people.
That information is essential for regulatory agencies to assess whether credit unions are complying with their chartered purpose of serving people of modest means.
“ABA encourages NCUA to use this opportunity to improve transparency within the credit union industry, which is lacking relative to other financial services businesses,” Kleinpaste concluded.
