McWatters Talks Fraud, Budget Hearings: Onsite Coverage
WASHINGTON - NCUA Board Member J. Mark McWatters called for the NCUA to put more effort toward preventing fraud rather than issuing new rules and regulations.
McWatters said agency data showed approximately 58% of share insurance fund losses over the past five years were attributable to fraud.
“I question why more energy and supervisory effort are not focused on preventing fraud, rather than directed to more, and often onerous new rules and regulations for credit unions to follow. NCUA must take a more thoughtful and diligent approach to combating fraud and inadequate internal control systems at credit unions,” he said at CUNA’s Governmental Affairs Conference.
“This is a supervisory responsibility of the agency and NCUA should not seek to write new regulations unless the rules in place are clearly inadequate,” he added.
McWatters also vowed to continue the push for budget hearings.
“Regrettably, my recommendation for a public hearing on the budget—that is, receiving input from those of you who actually write the checks that fund the agency—was summarily rejected,” he said. “I will continue to advocate for an open budgetary process, because more transparency is better than less, more analysis is better than less and more critical thinking and honest debate is always better than less.”
McWatters invited stakeholders to communicate their issues and concerns regarding the NCUA budget directly to his office.
“I particularly welcome specific, concrete observations regarding the budget and the budgetary process as opposed to general, vague comments that often offer little in the way of meaningful guidance,” he said.
In his remarks, McWatters requested the NCUA board establish at least three formal advisory committees that advise the board on certain issues and report their findings to the NCUA Board on a regular basis.
He said the committees would have the mandate to advise the board about the budgetary process, the agency’s examination programs and the appeals process as well as areas where the NCUA could expedite regulatory relief for the credit union community without compromising the safety and soundness of the Share Insurance Fund.
“Regarding the latter point, and as I have previously noted, these areas of regulatory relief should include at a minimum, supplemental capital for risk-based capital purposes, and a complete rewrite of the member business lending and field of membership regulations,” McWatters said.