On-Site Coverage: Critics of NCUA Make Case For Reform
GREENBELT, Md. — Saying that the NCUA and other regulators are marching toward “regulatory extremism,” the leader of a movement aimed at pressuring Congress to make changes to the NCUA last night outlined the extent of his frustrations with the status quo.
“We are pleading with members of the [congressional] committees to place curbs on unregulated regulators who issue unreasonable regulations,” said Alcoa Tenn FCU President/CEO David Proffitt, the coordinator of the Committee on the Declaration of Grievances, during a speech at the Metropolitan Area Credit Union Management Association.
“Credit unions are being regulated into mediocrity, or regulated into mergers, or regulated out of existence,” Proffitt said. “We need regulators who have a business sense, who are member-oriented and understand marketing.”
Proffitt said the major purpose of the effort is to get lawmakers to provide greater oversight of and direction to the NCUA. He said the agency, and the regulators who promulgate rules such as the Bank Secrecy Act, need to be subject to greater checks and balances.
And he added that only Congress can perform that function.
Proffitt, who said 71 credit union leaders have signed his declaration, said he hadn’t received any response from lawmakers to his letter, which he sent in March.
Also, while he criticized the NCUA for overregulating and for not catching the problems at the corporate credit unions, he didn’t single out any current or former board members for criticism.
He noted that credit unions, and in turn their members, are being scapegoated via higher assessments for the NCUA’s failures on the corporates.
Ben Mauldin, a vice president of finance and IT at Alcoa Tenn FCU and a former NCUA examiner and corporate credit union executive, said the agency’s handling of the corporate situation was “just appalling.”
He said while "on paper," the corporates that the NCUA conserved needed to be the agency hasn’t disclosed enough about how PIMCO came up with its estimates. He also noted that the NCUA had examiners on site at several of the large corporates who should have caught problems earlier.
Neither Proffitt nor Mauldin specified what type of legislation they would want Congress to pass to make up for the past mistakes of regulators or prevent future overreaching.