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50 Years of Serving
NAFCU Chair Richard
Harris discusses the trade’s
efforts to help the industry.
Appealing to the Fintech
Consultant Kirk Korde-leski explains how CUs can
partner with their fintech
for Better Decisions
Stuart Levine says we must
be vigilant about cognitive
processes in the workplace.
Bankers Need a
NAFCU’s Dan Berger analyzes bankers’ comments
on alternative capital rules.
n May 18, 2017,
a very important
hearing was held in
the Dirksen Senate
Office Building on Capitol Hill by
the Senate Committee on Banking, Housing and Urban Affairs.
It was important because it most
likely marked the official start of
the debate on a 21st Century version of the Glass-Steagall Act.
It is widely known that both
Democrats and Republicans favor
some form of 21st Century banking restrictions; President Trump
and Senator Elizabeth Warren (
D-Mass.) included. To be clear, it is not
an “if” situation, but rather, what
type of banking restrictions will ultimately be enacted.
The original Glass-
Steagall Act was a De-
built between invest-
ment activities and
It was repealed in No-
vember 1999 as part
of the Financial Ser-
Act of 1999 (a.k.a. the
Act) by a bi-partisan
alliance that includ-
ed the then Clinton
White House and a
gress. GLBA voided the existing
Glass-Steagall restrictions – an ac-
tion that many have argued was a
major culprit in the collapse of the
mortgage markets in 2008.
Any new form of Glass-Steagall,
no matter how it is tailored for
the current economic situation,
would be vehemently opposed by
the banking industry. As to be expected, the American Bankers Association stated, “There is broad
agreement, including among all
our bank regulatory agencies, that
Glass-Steagall would not have prevented the crisis or the housing
market collapse.” In
closing the ABA added, “America’s economy depends on banks
of all sizes to meet the
needs of a large and
diverse group of clients, customers and
communities.” Not a
given the source.
Unions Fit Into the
This debate is important
it will decide whether
or not banks will retain the ability to conduct both commercial banking and risky
activities all under
the 2008 financial
crisis, our industry
missed its opportuni-
ty to effectively estab-
lish that “we didn’t
start the fire” and
that an unrestricted
was largely to blame.
And as a result, credit
unions were shoul-
dered with the same
multitude of laws
and regulations that
were intended for the
real architects of the
modern day calamity.
of all sizes have opposed all attempts
by credit unions to update the
way we serve consumers, both in
Congress and through an ongoing series of lawsuits against the
NCUA regarding regulatory improvements. We also face their
pleas, which reoccur like pollen
every year. Meanwhile, banks expect our cooperation on regulatory and legislative matters such as
repealing the Durbin Amendment
and the burden of financial regulation, caused mostly by them.
Weigh the public
opinion difference of
credit union taxation
versus bringing back a
version of Glass-Steagall to prevent another
2008 crisis. That media narrative is hopelessly unbalanced
against our “friends”
from the ABA.
As the Glass-Steagall debate unfolds in
the coming months,
the call to action to
credit unions is clear.
We ask that credit unions, credit
union leagues and our two national trade associations join together
with one voice on this important
debate of a 21st Century version of
Glass-Steagall. To ignore it could
leave our industry, our members
and our entire country open to a
repeat of the crisis of 2008.
We get a “do over” here to control the media narrative that finally sets the record straight on “who
started the fire” and what we need
to do to fix it once and for all.
Credit Unions Didn’t Start the Fire
Point Breeze CU
the 2008 financial crisis,
our industry missed
its opportunity to
effectively establish that
“we didn’t start the fire”
and that an unrestricted
banking industry was
largely to blame.’