WASHINGTON-In separate comment letters, two national credit union trade associations supported the idea of credit unions being permitted to offer sweep account services without being required to register as broker-dealers with the Securities and Exchange Commission (SEC). The issue has arisen out of an application for the Evangelical Christian Credit Union (ECCU) to do just that. "Allowing credit unions to offer such services without registering as a broker-dealer will enhance the ability of credit unions to compete with banks and thrifts, which will benefit both credit union members as well as bank and thrift customers," wrote CUNA Senior Vice President and Associate General Counsel Mary Dunn. "The regulatory framework and the examination standards that apply to credit unions will be sufficient to protect the interests of investors." "NAFCU supports extension of this exemption to ECCU and strongly encourages the Commission to extend such relief to all federal credit unions, the deposits of which are insured by the National Credit Union Share Insurance Fund, so that these credit unions may offer sweep accounts on the same terms and conditions as banks and thrifts," NAFCU President and CEO Fred Becker wrote. "As stated in NAFCU's comment letter to you dated July 17, 2001, federal credit unions have a consistent track record of exemplary service to their members, as well as unparalleled safety and soundness. NAFCU believes the extension of the exemption to federal credit unions is appropriate, in the public interest and consistent with the need for protection of investors." He emphasized that if measures are not taken, federal credit unions will be at a significant competitive disadvantage to banks and thrifts. "Registering as a broker-dealer involves significant fees and examinations that are well beyond the means of most credit unions," Becker wrote. Dunn proposed that CUNA's Broker Activities Task Force members meet with the SEC as it creates a process for the agency to address future exemption requests from individual credit unions seeking to offer other broker services. "We believe that seeking comments whenever a new service is requested would be needlessly burdensome for the credit union system as well as for the SEC," Dunn wrote. "We will contact SEC staff within the next few weeks to begin these efforts." -firstname.lastname@example.org
CUNA, NAFCU comment on broker-dealer issues
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