NASCUS Communicates State Regulatory Perspective to Regulatory Reform Conferees
June 14, 2010 The House and Senate continue in conference to reconcile their two versions of regulatory reform legislation.
NASCUS wrote to conferees to encourage them to add state regulators to the Financial Stability Oversight Council, a group that will oversee systemic risk and other threats to financial regulation and the safety and soundness of the system. The letter recommends that a state credit union, banking, securities and insurance regulator should represent the state system on the Oversight Council. NASCUS also recommended the National Credit Union Administration (NCUA) Chairman should be a voting member of the Council.
In the letter, NASCUS explained that a state credit union regulator sits on the Federal Financial Institutions Examination Council (FFIEC) State Liaison Committee, a voting member of FFIEC, as provided by Congress in 2006. Providing for similar organization in the Oversight Council would make it consistent with existing regulatory structures that allow for important state and federal regulator information sharing and consultation. State regulators and their rich knowledge and expertise must have a valued role in the nation's mitigation of systemic risk, wrote NASCUS.
NASCUS also recommended that conferees formalize partnership with state regulators on consumer protection and protect against any further preemption of state law. To see our letter, follow this link. It was sent to all House and Senate conferees as they were announced over the past two weeks.
The bill is expected to be reconciled, approved by Congress and sent to the President for his signature by the July 4 holiday. The conference began with consideration of a base text, incorporating some House elements from H.R. 4173, but mostly comprised of the Senate legislation, S. 3217.
Two main elements of reconciliation will be how to address consumer protection and derivatives. There is also industry opposition to interchange language that would direct the Federal Reserve to set standards for debit card interchange fees.
NASCUS will provide updates on the regulatory reform conference as news develops.