NASCUS Chairman Thomas J. Candon said in an interview at the group's State System Summit that the association "can work with the concept of a reform, including the proposed consumer regulatory agency, but we want to work with lawmakers to make sure the state role is recognized. We don't want the agency to usurp the central role that states have in consumer protection."
Candon, who is Vermont's deputy commissioner of banking, said the federal regulatory changes should be a floor not a ceiling and states should still be allowed to go further in regulating certain products and practices if they want to.
Congress is expected to take additional action on regulatory restructuring when it returns from recess after Labor Day and there has been a strong divide within the financial services community about the proposals, especially the new agency.
On the supplemental capital issue, NASCUS and other credit union trade associations have been working with the NCUA, which is developing a white paper on the subject.
Candon said they "have come a long way," on the issue of supplemental capital, but they want to be certain that any changes to the law and regulations contain adequate safeguards to ensure that there is safety and soundness. He said one possibility would be allowing members to provide additional capital-which wouldn't be guaranteed by the NCUSIF-but would require the credit union to provide warnings so that members know the risk involved in the investment.
NASCUS Credit Union Advisory Council Chairman Parker Cann said another possibility would be to sell non-voting instruments to those outside of a credit union.
Cann is the senior vice president and general counsel of Boeing Employees' Credit Union.
NASCUS President Mary Martha Fortney said her group realizes that supplemental capital-which is allowed in certain states such as North Carolina and Texas-is not a panacea for the financial problems facing some credit unions.
"It's not a magic pill for every credit union, but it could be a tool," she said.