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 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 May 9 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 said 71 credit union leaders have signed his declaration, but that 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 in oversight of 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 that 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. And he noted that the NCUA had examiners on site at several of the large corporates who should have caught problems earlier.
He said the examinations of credit unions should be taken away from the NCUA and given to the Office of the Comptroller of the Currency because it will perform more rigorous oversight.
Proffitt said many regulatory agencies, including the Fed, had issued rules that were costly and unnecessary. He noted that the rules mandating the opt-in of overdraft protection that the Fed issued had cost his credit union, which has assets of $166 million, "thousands of dollars" in lost revenue.
Neither Proffitt nor Mauldin specified what type of legislation they want Congress to pass to make up for the past mistakes of regulators or prevent future overreaching.