January 10, 2013 – For Immediate Release
Statements from NASCUS President and CEO Mary Martha Fortney on NCUA's Final Definition of Troubled Condition Rule
Arlington, Va. – Today, the National Credit Union Administration (NCUA) approved its final rule on the Definition of Trouble Condition.
NASCUS President and CEO Mary Martha Fortney made the following comments regarding the final troubled condition rule today.
“We appreciate that the NCUA listened to NASCUS state regulators and made it clear in the rule that NCUA may only declare a state credit union 'troubled' after an on-site examination and following consultation with the state regulator before making its determination, ” said Fortney.
"NASCUS will continue to take every opportunity to preserve state authority in the oversight of federally insured state-chartered credit unions." continued Fortney. "In pursuit of this, it was encouraging to hear the NCUA reaffirm the value of and their commitment to the dual chartering system. Likewise, NCUA's acknowledgement of its reliance on state examinations and the expertise of their state counterparts was reassuring."
Throughout the rulemaking process, NASCUS and state regulators worked diligently to ensure that NCUA's evaluation of the proposed change to the definition of troubled condition reflected a balanced approach to the joint supervisory responsibilities of NCUA and state regulators. NASCUS questioned the need for a change to a rule that has worked well in the overwhelming number of cases since its original promulgation. NASCUS particularly stressed the disconcerting possibility that pursuant to the change as proposed, federally insured state-chartered credit unions faced the prospect of being classified as "troubled" by NCUA without NCUA having been onsite at the credit union to fully familiarize themselves with the institution. That the final rule explicitly requires an NCUA onsite presence as a pre-requisite for classifying a state-chartered credit union as troubled, as well as requiring consultation with the state regulator, represents an improvement from the rule as proposed.
Jenny Champagne, VP Regulatory Development and Government Relations, email@example.com or (703) 528-5974