NCUA leader notes state system priorities in GAC remarks
Feb. 28, 2017 -- In outlining 15 areas for reducing the regulatory and supervisory burden on credit unions, NCUA Acting Chairman J. Mark McWatters selected four that NASCUS has urged him to consider in a recent letter, during his address to the credit union audience at the CUNA GAC Tuesday.
Plus, in his remarks at the Washington gathering, McWatters said that the agency he now leads should work with state regulators to strengthen the state system.
In early February, after McWatters had been appointed acting NCUA chairman, NASCUS President and CEO Lucy Ito sent to him a letter outlining several key areas where “NASCUS and the state credit union system are particularly well-positioned to assist” the agency. In his remarks Tuesday, McWatters said that he and Board Member Rick Metsger and the NCUA staff were analyzing 15 issues, with an aim of reducing the regulatory and supervisory burden on the credit union community “without threatening the safety and soundness of the National Credit Union Share Insurance Fund.”
Four of those issues were recommended in NASCUS’ letter earlier in the month. McWatters noted them as:
- NCUA should revisit the risk-based net worth regulation “and other needlessly burdensome rules;”
- The agency should form a Credit Union Advisory Council in order to hear – and learn – directly from the credit union community “as we work collaboratively to identify needless regulatory burden and create cost-effective solutions.”
- The credit union regulator should consider how it could work more closely with the Financial Accounting Standards Board (FASB) by providing technical expertise to “to help ensure that the cooperative, not-for-profit spirit and other unique attributes of the credit union community are not overlooked in their rules, guidance, and enforcement actions.” (McWatters also included the CFPB in this approach.)
- NCUA should work with Congress to update the Federal Credit Union Act to “facilitate credit union operations and growth, and reflect the way people share common bonds today.”
Additionally, the acting chairman said that his agency should find additional ways to work with state regulators to “to strengthen and enhance the dual-chartering system and examination efficiency and effectiveness.”
In other comments, McWatters raised the possibility of closing the Temporary Corporate Credit Union Stabilization Fund (TCCUSF) this year, four years before the scheduled closing. Money from the fund would be moved into the National Credit Union Share Insurance Fund in order to avoid charging a premium. NCUA has projected the Share Insurance Fund’s equity ratio, already below the 1.30 percent operating level, will continue to decline, and staff last November projected a possible premium of 3 to 6 basis points.
(For all 15 issues named by McWatters, see the full text of his speech.)