That's the assessment of NCUA Executive Director David Marquis. He noted in remarks at the Metropolitan Area Credit Union Management Association that corporate credit unions and trade associations pushed for less regulation. Yet he also speculated that while his agency might not have pushed hard enough for stronger regulations, if it had done so it might have not succeeded.
"Could we have pushed harder on safety and soundness? Perhaps. I'm not sure we would have won that political battle in that environment," he said.
Marquis discussed corporate credit unions as part of a panel discussion that also featured Jay Murray, president/CEO, Mid-Atlantic Corporate FCU and Jane Melchionda, president/CEO, EasCorp. It was moderated by Credit Union Times Editor-in-Chief Sarah Snell Cooke.
The latest set of problems facing corporate credit unions prompted the agency to issue a proposed set of rules that would mandate higher capital requirements, more limits on the type of investments they can make and more disclosure requirements on executive and board compensation. The proposed rules have three levels of minimum capital ratios, ranging from 4% to 8%.
Melchionda said for the corporate system to survive it needs three things: good management, good regulations and good regulatory oversight. She said the latest economic crisis has been devastating for her Burlington, Mass.-based corporate credit union. She said they had depleted almost all of their retained earnings, which had taken almost 30 years to build up.
Murray, whose credit union is based in Middletown, Pa., said the final NCUA rule should be one that will have enough safeguards to "prevent what had happened from happening again." He also wants to make sure that the new rules ensure the long-term viability of the cooperative system that has served the system so well.