Legislative and regulatory changes have blurred distinctions between credit unions and other depository institutions and raised questions about the tax-exempt status of credit unions. This report (1) assesses the effect of the Credit Union Membership Access Act on credit union membership and charters, (2) reviews the National Credit Union Administration's (NCUA) efforts to expand services to low- and moderate-income individuals, (3) compares rates offered by credit unions with comparably sized banks, (4) discusses unrelated business income tax issues, and (5) assesses transparency of credit union senior executive compensation. To address our objectives, we obtained NCUA data on credit union membership, charter changes, efforts to target those of modest means, and executive disclosure requirements. We also analyzed Federal Reserve Board's Survey of Consumer Finances and Internal Revenue Service data.
Recommendations for Executive Action
|National Credit Union Administration||To help ensure that credit unions are fulfilling their tax-exempt mission of providing financial services to their members, especially those of low or moderate incomes, the Chairman of NCUA should systematically obtain information on the income levels of federal credit union members to allow NCUA to track and monitor the progress of credit unions in serving low- and moderate-income populations. NCUA's recent pilot survey to measure the income of credit union members could serve as a starting point to obtain more detailed information on credit union member income. Ideally, NCUA should expand its survey to allow the agency to monitor member income characteristics by credit union charter type, obtain information on the financial services that low- and moderate-income members actually use, and monitor progress over time.|
|National Credit Union Administration||To increase the transparency of executive compensation and enhance accountability of credit unions, the Chairman of the NCUA should take action to ensure that information on federal credit union executive compensation is available to credit union members and the public for review and inspection. To achieve this, NCUA may want to consider options such as requiring federal credit unions to include specific information on executive compensation in call reports or issuing regulations that would require all federal credit unions to make executive compensation information available to members of credit unions at annual meetings.|