March 19, 2009
NASCUS to Senate Committee: Maintain and Strengthen State Supervision, Recognize Value of Dual Chartering in Regulatory Reform
Washington, D.C. NASCUS testified before the Senate Banking, Housing and Urban Affairs Committee today emphasizing the proper role of state authority and dual chartering in Congressional regulatory reform efforts.
NASCUS Chairman George Reynolds, senior deputy commissioner of the Georgia Department of Banking and Finance, represented NASCUS at the hearing tilted: "Modernizing Bank Supervision and Regulation." Reynolds stated that four principles must be considered in the Committee's regulatory modernization legislation: preserve charter choice and dual chartering, maintain states' role in financial regulation, modernize the capital system for credit unions and recognize the value of state authority in consumer protection.
"Any modernized regulatory restructuring must recognize charter choice," stated Reynolds. "The dual chartering system is threatened by the preemption of state laws and the push for a more uniform regulatory system. As Congress discusses regulatory modernization, it is important that new policies do not squelch the innovation and enhanced regulatory structure provided by the dual chartering system."
Capital reform for credit unions is also necessary to regulatory modernization, Reynolds explained. NASCUS encouraged the Committee to consider supplemental capital and risk-based capital requirements for credit unions as an essential part of a modern regulatory system for credit unions. "Credit unions need access to supplemental capital and risk-based capital requirements," said Reynolds. "The current economic environment necessitates that now is the time for capital reform for credit unions."
Reynolds also encouraged the Committee to recognize states' rights in credit union regulation. "The dual chartering system is predicated on the rights of states to authorize varying powers for their state credit unions," Reynolds told the Committee. "I believe any regulatory structure considered by Congress should not limit state regulatory authority and innovation." Reynolds added that consumer protections at the state level can better serve and protect states' citizens. "Congress should maintain and enhance the states’ high standards of consumer protection," he told the Committee.
NASCUS also highlighted the value of federal and state regulators' shared commitment to protecting the credit union system, a working relationship intended by Congress in the Federal Credit Union Act. Reynolds urged the Committee to maintain a separate credit union regulator, credit union insurance fund and state and federal credit union charter options.
NASCUS' full written testimony can be downloaded at this link.
Kate Hartig, VP, Public Relations and Legislative Affairs, (703) 528-0669 or email@example.com