WASHINGTON - Speaking at her first CUNA GAC as chairman of NASCUS, Sarah Vega, Director of the Illinois Department of Financial Institutions, credited the state credit union system and state regulators for fostering a business climate that has allowed state-chartered credit unions to prosper, and defended the viability of the dual chartering system. "State credit unions must have the powers to offer competitive services if they hope to remain viable," said Vega. "That means that state-chartered credit unions must have the option to exercise state powers they have to offer non-member deposits, even if federally chartered credit unions can not. "It means state-chartered credit unions must have the option of exercising the state powers to offer investment and insurance products - even if federally chartered credit unions can not. As a credit union movement, we must commit ourselves to being sure that state credit unions have the tools to meet their members needs, even if the needs and the tools are different from those of the nation's federal credit unions. As a credit union movement, we must commit ourselves to ensuring that just because a state-chartered credit union has its shared insured by the NCUA, it is not expected to look and act like a federal credit union." State regulators are charged with ensuring compliance with state and federal laws and regulations, determining a credit union is operating in a safe and sound manner, and supporting the innovation of credit union services for their members. Beyond that, though, "state regulators believe that effective regulators must stand back and let boards and CEOs manage their credit unions," said Vega. If federal regulations prevent federal credit unions from offering certain services to their members, that should not preclude state credit unions from offering the same services and effectively meeting the needs of their members, she offered. At the same time, if the trade organizations decide to push for legislative or regulatory changes conducive to promoting business activity for federal credit unions, NASCUS will stand with them. In exchange for a promise by directors and CEOs of federal and shate-chartered credit unions to work together to nurture the dual chartering system, Vega recommitted NASCUS to working for the benefit of both the state and federal credit union systems. "NASCUS has always been committed to being sure there is a viable dual chartering system," she said. "Unless both the state and the federal acts enable credit unions to fulfill their members' needs, there is no viable dual chartering system." -
ekingoff@cutimes.com
