SAN ANTONIO — The NCUA and other regulators are over regulating to prevent another financial crisis, and CUNA is trying to push back to give credit unions more autonomy.
That was the message of CUNA's top executives during a panel discussion at America's Credit Union Conference.
"The NCUA is over regulating and going overboard in the examination process, and we are trying to make it more balanced," said CUNA Deputy General Counsel Mary Dunn.
In response to a question from moderator NCUA Counsel Eric Richard, Dunn said the agency isn't out to destroy credit unions. However, she expressed concern that it sometimes over reaches by seeing a problem that impacts a few credit unions and trying to extrapolate a larger trend when there isn’t necessarily one. This often causes the agency to create a solution that increases the compliance burden for all credit unions.
CUNA Vice President for Legislative Affairs Ryan Donovan said regulators are getting considerable pressure from lawmakers to take steps to prevent another financial crisis.
But CUNA President/CEO Bill Cheney said that since the GOP took over the House, there is more concern about easing regulatory burden.
Donovan said while credit unions were disappointed that they weren’t able to persuade lawmakers to delay implementation of the Federal Reserve’s interchange rule “the grassroots efforts made an impact notwithstanding the fact that we didn’t get to 60 votes.”
Dunn said they have met several times with key Fed officials to state the concerns of credit unions and try to ensure that the final rule protects small issuers.
She added that CUNA is “holding Visa and MasterCard’s feet to the fire to ensure that they establish a two-tiered payment system.”
Dunn said another source of regulatory challenges will be the new Consumer Financial Protection Bureau, which will enforce many laws and regulations that impact the operations of credit unions. She praised the Obama administration for setting up a special office in the bureau to deal with the concerns of credit unions and community banks and said she hopes the bureau will establish an office to monitor the regulatory burden facing financial institutions as a result of the additional regulations.
Cheney said there has to be some regulatory relief because “the current path is unsustainable.”
Dunn also said CUNA would encourage the NCUA to consider lowering the reserve level of the NCUSIF and transfer any money to the Temporary Corporate Credit Union Stabilization Fund, which could reduce corporate assessments that are charged to credit unions.