October 14, 2009
NASCUS Represents State System at Senate Hearing, Advocates for Supplemental Capital for Credit Unions
Washington, D.C. NASCUS Chairman Thomas Candon joined federal and state regulators for a hearing in the Senate to report information on the condition of the state credit union system and recommend areas for reform.
Candon, deputy commissioner of banking and securities of the Vermont Department of Banking, Insurance, Securities and Health Care Administration, represented state regulators before the Subcommittee on Financial Institutions of the Senate Banking, Housing and Urban Affairs Committee at the October 14 hearing on the state of the banking industry.
The NASCUS Chairman explained that like all financial institutions, state credit unions have been adversely affected by the economic downturn. However, at this point, Candon told the Subcommittee that state natural person credit unions remain generally healthy and continue to serve the needs of their members and their communities. While state credit unions did not engage in many of the practices that precipitated the current market downturn, Candon emphasized that other economic issues like unemployment, delinquencies and charge-offs are affecting consumer credit portfolios of credit unions.
Further, NASCUS Chairman Candon told the Subcommittee that credit unions need options to raise capital, specifically access to supplemental capital. Access to supplemental capital for credit unions would enable credit unions to respond proactively to changing market conditions, thereby strengthening their safety and soundness and providing a buffer for the credit union share insurance fund. "Allowing credit unions access to supplemental capital with regulatory approval and robust oversight will improve credit unions' ability to react to market conditions, grow safely into the future and serve their members in this challenged economy," stated Candon. "We feel strongly that now is the time to permit this important change."
He also explained to the Subcommittee that NASCUS and state regulators are working cooperatively with the National Credit Union Administration (NCUA) to mitigate the impact of corporate credit union losses and to enhance corporates' risk management, governance and capital standards.
In addition, NASCUS encouraged the Committee to retain dual chartering and state supervision as it develops and considers financial reform legislation. Candon pointed to the value of state regulators' local supervision and their ability to identify risk and respond to the needs of consumers in this challenged economy.
To read NASCUS' full written testimony, follow this link.
Kate Hartig, VP, Public Relations and Legislative Affairs, (703) 528-0669 or email@example.com