Better Than a Spoonful of Sugar: Letter to the Editor
R-O-L-A-I-D-S spells relief. That is what Rolaids producers have said for years and their product has provided relief for millions of Americans.
For credit unions across the country relief is L-E-S-S-R-E-G-S. Anything that would lessen the regulatory burden placed on credit unions and make their jobs easier is considered relief.
The voice of credit unions has been heard. The NCUA’s chairman recently announced that the board will consider granting relief in some areas that will be beneficial to credit unions. Those areas include: Greater flexibility in dealing with fixed assets, greater flexibility on member business lending to allow credit unions to make more loans and changes to bylaws for federal credit unions that will modernize and make more efficient certain aspects of how business is conducted.
Placing these items on the board agenda is a good step in the direction I have been urging the NCUA to move. For some time now I have advocated for a “step back and fresh eyes” review of regulations credit unions are required to comply with. For over five years now, since the financial crisis swept over us in 2008, regulators in the financial services industry have been implementing regulations they believe are needed to prvent a reoccurrence of the problem and make financial institutions strong enough to withstand future economic fluctuations. And, most will agree, much of the new regulations were needed and will serve the purpose they were written to achieve.
Realistically, however, some of the regulations were perhaps too aggressive and have actually burdened financial institutions, including credit unions, with excessive regulatory compliance issues.
Now that the dust has settled, credit unions have survived and handled the fallout from the crisis, the economy has begun to improve, unemployment continues to decline and consumers are buying again. It is time financial regulators step back, review what has been put in place and take corrective action, where needed, to make it better for the regulated while maintaining the safety and soundness of the financial services industry.
The NCUA’s fixed asset rule is a great place to start as it has easy fixes that will help credit unions. The member business lending rule, another area where I have advocated the NCUA can make significant changes, will further the growth of lending to small businesses and that will further the growth of the economy. The NCUA can pursue several other regulatory fixes without the need to involve Congress, like changes to the federal credit union bylaws rule, which would make needed procedural changes.
Changes for the good and changes for the better will make credit unions feel relief just like taking Rolaids can.
Attorney and former NCUA board member