Despite a June 4 Memorandum of Understanding released jointly by five federalfinancial supervisory agencies that outlines how they willcoordinate their supervisory activities to reduce regulatoryburden, NAFCU President/CEO Fred Becker has asked TreasurySecretary Timothy Geithner, acting as chairman of the Financial Stability Oversight Council, to intervene on behalfof credit unions.

“As we have approached each agency regarding the ever-increasingregulatory burden, they quickly respond that the rules being issuedby other agencies are outside of their purview,” Becker wrote in aletter to Geithner on June 27. “NAFCU believes the FSOC iswell-positioned to rectify this lack of coordination. We ask thatyou establish within the FSOC robust interagency coordination onthe issuance of rules impacting financial institutions.”

Becker cited Consumer Financial Protection Bureau new andpending rules, new and pending NCUA rules on concentration andinterest rate risk, loan participations, credit union service organizations and appraisal management,Department of Justice regulations on physical assess to ATMs,Department of Labor regulations on employee rights and the Financial Crimes Enforcement Network regulations on currencytransaction reports and suspicious activity reports as examples ofregulatory burdens on credit unions.

Under the Dodd-Frank Act, the FSOC has a duty to facilitateregulatory coordination, Becker said. This duty includesfacilitating information sharing and coordination among the memberagencies of domestic financial services policy development,rulemaking, examinations, reporting requirements and enforcementactions.

Through this role, the FSOC is effectively charged withameliorating weaknesses within the regulatory structure, promotinga safer and a more stable system, the NAFCU president said.

“NAFCU also urges the FSOC to establish policy requiring memberagencies to conduct and publish a thorough cost-benefit analysisprior to issuing regulations as well as a separate cost-benefitanalysis a year after each regulation the agency prescribes andevery other year thereafter,” Becker wrote.

The NAFCU leader also recommends a cost-benefit analysis everytwo years on each regulation an agency has on its books, with theagency required to justify the regulations' continuedexistence.

“These cost analyses should be reviewed by the FSOC to assessthe total impact on the financial services industry. We stronglybelieve that conducting such exercises would better instructregulators of the high cost of compliance, and equip them with theinformation necessary to assess whether a particular regulation iseffective and justifiable,” Becker said.

Section 1025 of Dodd-Frank requires that the CFPB, along withthe NCUA, FDIC, Federal Reserve and the Office of the Comptrollerof the Currency, coordinate aspects of their supervision of insureddepository institutions with more than $10 billion in assets.

The coordination includes scheduling examinations, conductingsimultaneous examinations of covered depository institutions unlessan institution requests separate examinations, and sharing draftreports of examination for comment.

Under the June 4 MOU, the agencies pledged to coordinateexaminations and other supervisory activities, share supervisoryinformation concerning compliance, coordinate consumer compliancerisk management programs, and coordinate activities such asunderwriting, sales, marketing, servicing, collections, if they arerelated to consumer financial products or services.