Letter: NCUA Aims for Tailored Rules
The suggestion in your Editor’s Column (CU Times, July 25) that a Republican Administration could mean a 180-degree turn in credit union regulation is unfortunately partisan.
Regardless of one’s political affiliation, NCUA Board members have a responsibility to protect the National Credit Union Share Insurance Fund from losses. That’s why the NCUA Board unanimously approved carefully tailored rules to improve accountability at corporate credit unions and manage interest rate risks. It’s the same reason we voted unanimously for proposals to increase transparency in CUSO reporting and mitigate loan participation risks.
We cannot forget the many problems credit unions endured as a result of the financial crisis of 2007-08. Deregulation and lax oversight in the years leading up to the crisis were root causes of those problems. We cannot repeat the same mistakes.
In issuing and proposing new rules, we responded to the problems identified during the previous crisis, and we are now addressing the risks emerging on the horizon.
But in adopting new rules and supervising credit unions, we also need balance. We need to target rules to the risks without imposing unnecessary burdens. And we need to eliminate rules no longer in sync with the modern marketplace. That’s what my Regulatory Modernization Initiative seeks to do.
While addressing risks, the NCUA Board is providing relief from regulatory burdens, where sensible. Credit unions asked for regulatory relief on troubled debt restructuring, regulatory flexibility rules, fields of membership requirements, and low-income designations. The NCUA Board heard these concerns and acted to provide regulatory relief.
To learn more about credit unions’ concerns, I initiated a series of Listening Sessions around the country. This fall, the NCUA Board will take up regulatory relief ideas raised at these meetings.
In making decisions, President Truman often relied on a “buck stops here” philosophy. That’s sound advice which guides my decision-making on the NCUA Board.
Our rulemakings seek to ensure that bad decisions or faulty management at a few credit unions doesn’t result in unnecessary Share Insurance Fund premiums for well-managed credit unions. In essence, the buck should stop at the doors of credit unions that cause undue risks.
That’s why the NCUA Board is working to put in place sensible safety and soundness rules that will protect the credit union industry from future crises.
National Credit Union Administration