Speaking at a securities litigation and regulatory practice seminar in Atlanta, Aguilar said the market crisis has financial experts and legislators revisiting the regulatory structure associated with financial markets.
"Currently, many agencies oversee banks, another regulates credit unions, the SEC regulates securities markets and the Commodity Futures Trading Commission plays a role in financial futures, and as I've said, nobody regulates a current area of concern: credit default swaps," Aguilar said.
Aguilar said all of the regulators could do a better job of communicating with each other. While the SEC has initiated memorandums of understanding with the CFTC, Federal Reserve and the Departments of Labor and Treasury, "more still needs to be done to make sure that regulators are working effectively in concert."
"Anyone who is currently watching the news understands that the lack of transparency in our capital markets is a major factor driving the requests for greater regulation," Aguilar said.
Still, regulators may have to brace for the possibility.
"Today's financial markets are so interconnected that centralized oversight by a single independent regulator may make sense," Aguilar said. "The commission recognizes that our world is shrinking and that financial markets are interconnected in a Gordian knot."
New SBA Lender Oversight
Regulations Go Into Effect
WASHINGTON -- A Small Business Administration interim final rule for
new lender oversight regulations in its guaranteed loan programs went into effect
on Jan. 12.
SBA had proposed a regulatory framework in the 7(a), 504 and Microloan lending programs to enhance the Office of Credit Risk Management's ability to maximize efficiency across lending programs by effectively managing program credit risk, monitoring lender performance and enforcing lending program requirements.
The recent interim final rule codified a new framework for SBA's lender oversight program to ensure that directions are clear and transparent to lenders and the public. It clarified supervision and enforcement actions for all SBA lenders and partners, according to the agency.
SBA first published the proposed lender oversight regulations in October 2007. The agency said it received nearly 300 public comments and met with lenders to address key issues.
"Given the difficult economy, SBA must do whatever it can to protect small businesses and the nation's taxpayers from unnecessary risk," said SBA Acting Administrator Sandy Baruah. "With improved oversight, SBA is taking action to reduce the potential for waste, fraud, and abuse in its loan programs."
The agency said it will continue to accept comments on the interim rule until March 11, 2009.
Independent Regulator, MBL Changes
Are Among NAFCU's Priorities
WASHINGTON -- NAFCU hopes to keep a separate regulator for credit unions and eliminate the cap on member business loans this year.
Along with these resolutions, the association's priorities for 2009 also include maintaining an independent regulator and share insurance system, in light of talk by some advocates to place all financial services under the same agency.
Other NAFCU goals:
oAdvancing the greater member business lending authority, the ability to adopt underserved areas regardless of charter type and modernized capital standards that preserve mutuality.
oEducating Congress and the public about credit unions' service to communities, their work to thwart predatory lending, focus on members' data security and contributions to financial literacy.
oEnsuring legislative and regulatory efforts do not bring unintended consequences and burdens to credit unions.
oPreserving credit unions' not-for-profit, member-owned, cooperative structure and safe, sound operations.
oEnhancing NAFCU's relationship with members of Congress through NAFCU/PAC and its political activities.
oBolstering credit union mortgage lending through NAFCU's continued alliance with Fannie Mae.
oHelping credit unions improve growth and productivity, educate staff and attain ever-higher best practices through NAFCU programs and those of its subsidiary, NAFCU Services Corporation.
Frank Seeks Permanent Lift of CLF Cap
WASHINGTON -- House Financial Services Committee Chairman Barney Frank is asking Federal Reserve Chairman Ben S. Bernanke to support permanently lifting the cap on the Central Liquidity Facility.
Frank wrote in a letter that such an action will help the CLF programs that will "keep the credit union system strong."
He thanked Bernanke for supporting NCUA's request to use the CLF for the Credit Union Homeowners Affordability Relief Program, which will assist homeowners struggling to make mortgage payments and the Credit Union System Investment Program, designed to help provide liquidity to corporate credit unions.
According to the NCUA, the CLF is funding $164 million in advances under the CU HARP and approximately $4.9 billion in advances under the CU SIP.
Last fall, Congress passed a measure raising the CLF's ceiling from the $1.5 billion it had been at since 2001. The change allows the facility to lend money to credit unions based on the formula established in the Federal Credit Union Act, which is currently estimated to be $41.5 billion.
Frank also said he feared that credit unions would be hurt by Treasury Secretary Henry Paulson's "misguided" decision not to use Troubled Asset Recovery Program to buy illiquid assets.
Smith Named to Fed Advisory Board
WASHINGTON -- Randy Smith, president/CEO of Randolph-Brooks FCU of Live Oak, Texas, and a NAFCU Board member, was named to a two-year term on the Federal Reserve Board's Thrift Institutions Advisory Council.
Smith, whose term continues through 2010, is one of two credit union representatives on the 12-member panel. The other is Christopher Jillson, president/CEO of Sandia Laboratory FCU in Albuquerque. Jillson's term ends Dec. 31, 2010.
The council meets three times a year with the Fed Board to discuss developments relating to thrift institutions, the housing industry, mortgage finance and regulatory issues.
NCUA Announces Changing of Guard
ALEXANDRIA, Va. -- Credit unions in two states will be supervised by different offices of the NCUA.
Credit unions in Alaska, previously contained in NCUA's Region V, are now overseen by the NCUA's Region II office in Alexandria, Va. And those in Nevada, also formerly Region V, are overseen by the agency's Region I office in Albany, N.Y.
The agency said the changes, which took effect on Jan. 1, were needed to "reallocate resources to better meet NCUA supervision objectives and adjust for workload imbalances."