The NCUA should not issue any regulation for the next six months and should do a better job of justifying the need for any new rules. Those are among the requests that CUNA made in a 15-page letter sent late last week to NCUA Chairman Debbie Matz.
CUNA CEO Bill Cheney wrote that credit unions are overburdened by regulations and this is a good time to temporarily curb them because there “are no new, material systemic problems within the credit union system, current safety and soundness concerns within natural person and corporate credit unions seem to be manageable.’’
Matz hasn’t responded to the letter yet. When asked whether CUNA is optimistic about the prospects for the agency initiating a moratorium, CUNA Senior Vice President and Deputy General Counsel Mary Mitchell Dunn said today that “hope springs eternal.’’ In his letter, Cheney also urged the agency to only issue regulations that address safety and soundness concerns, unless required by law to issue other ones. He also recommended that the NCUA seek input before issuing a rule about whether the rule is needed to address existing problems or “whether other approaches could be reasonable.’’
He also recommended that the agency provide the results of its cost benefit and legal analyses of potential regulations. In addition, Cheney urged the agency to reinstate and expand the list of regulatory requirements from which well-managed credit unions are exempt.
Cheney also reiterated some of the association’s previously addressed concerns about the examination process. He urged the agency resolve disagreements before issuing a Document of Resolution or Letter of Understanding and Agreement and to improve ways for credit union executives to discuss concerns about their CAMEL ratings and other issues with NCUA personnel.Cheney also suggested that the agency instruct examiners not to enforce agency guidance as if it were a regulation and not to interpret regulations that are implemented by other agencies.
During a speech at NAFCU’s Congressional Caucus last month, Matz announced that the agency would ease up on some regulations but strengthen and expand others. She said that her goal is to “target risky behaviors in credit unions, not credit unions themselves.” She said later this fall the agency will issue a proposed rule mandating loan originators to keep some risk on their balance sheets and require loan buyers to increase due diligence. But Matz also promised that the agency would expand some of the benefits that are currently only available to well-managed credit union under the Regulatory Flexibility program.