September 23, 2009
NASCUS Encourages House Committee to Preserve Dual Chartering and Partner with States in Federal Regulatory Reform, Consumer Protection
ARLINGTON, Va. Today as the House Financial Services Committee continued its series of hearings on regulatory reform, NASCUS provided the Committee with a submission for the official hearing record on "Federal Regulator Perspectives on Financial Regulatory Reform Proposals."
In its written statement, NASCUS encouraged the Committee to recognize the value of the nation's dual financial regulatory system as it considers regulatory modernization efforts. NASCUS believes that the dual regulatory regime of state and federal regulators as well as charter choice allow for competition, diversity and innovation, all elements that remain critical for the viability of nation's financial institutions.
NASCUS recommended that the Committee partner with state regulators on consumer protection, uphold state consumer protection laws, affirm consultation with state regulators on systemic risk and allow credit unions access to supplemental capital.
Regarding the proposed Consumer Financial Protection Agency (CFPA), NASCUS emphasized to the Committee that for the proposed agency to be most effective, it must partner with state regulatory authorities. NASCUS stated that state regulatory authorities should be involved in the CFPA so that existing knowledge and standards developed at the state level are leveraged to protect consumers to the maximum degree possible. "By drawing on the expertise of state regulators and their ability to more readily identify emerging issues at the local level, the CFPA can address those issues before they become national in scope," stated NASCUS.
NASCUS' comments also focused on the necessity of state regulatory involvement in any new proposals to address systemic risk. Further, NASCUS requested that the Committee formalize the states' involvement in mitigating systemic risk as legislation proceeds. "State regulators and their rich knowledge and expertise must have a valued role in the nationís mechanisms to mitigate systemic risk," stressed NASCUS.
As part of regulatory modernization, NASCUS encouraged the Committee to consider supplemental capital for credit unions. NASCUS stressed to the Committee that credit unions must have tools to react more quickly to market conditions, a task that is often difficult because of credit unions' reliance on retained earnings for capital growth.
To view NASCUS' full hearing submission, follow this link.
Kate Hartig, VP, Public Relations and Legislative Affairs, (703) 528-0669 or firstname.lastname@example.org