Thaler also plugged NAFCU-supported S. 2231 and its companion bill H.R. 1418, adding “the Administration, Treasury Secretary Geithner, the NCUA and a large bipartisan contingent on Capitol Hill all recognize the fact that the bankers don't want people to know – allowing credit unions to make more member business loans will create jobs and help the economy.”

Including low-income credit unions and their cap-free business lending benefit in the Obama Administration's drought relief package ruffled the feathers of the Independent Community Bankers of America, which called the NCUA's proactive move to pre-approve credit unions eligible for low-income status “outrageous” and said the action defied the will of Congress and “any rational regulatory policy authority.”

“The administration and NCUA appear to be exploiting the nation's drought conditions to rationalize these designations—despite the fact that less than half of these credit unions are in states with extreme drought conditions,” the ICBA said in a release.

Of the LICU-eligible institutions, the NCUA said 470 are federal credit unions, which represent 47% of potential new LICUs, 52% of potential new assets and 54% of potential new members, which are headquartered in states the federal government has identified as being in “extreme” drought conditions.

Because Congress has failed to pass MBL legislation for a decade, the NCUA “has thumbed its nose at the legislative branch in favor of its own aggressive actions to dramatically expand the tax-exempt credit unions' powers,” the ICBA said.

Increasing low-income credit union business lending will aggravate the federal budget deficit and reduce federal revenues by favoring tax-subsidized credit unions over taxpaying community banks, the trade association said.

The ICBA reasoned that the MBL cap was set by Congress because credit unions serve people of modest means, and said if credit unions do more commercial lending, they should pay taxes.

However, the trade association's release omitted the fact that the program only allows credit unions that serve low-income populations to make business loans in excess of the statutory cap.