WASHINGTON – NCUA Board Member J. Mark McWatters called for theNCUA to put more effort toward preventingfraudrather than issuing new rules and regulations.

McWatters said agency data showed approximately 58% of shareinsurance fund losses over the past five years were attributable tofraud.

“I question why more energy and supervisory effort are notfocused on preventing fraud, rather than directed to more, andoften onerous new rules and regulations for credit unions tofollow. NCUA must take a more thoughtful and diligent approach tocombating fraud and inadequate internal control systems at creditunions,” he said at CUNA's Governmental Affairs Conference March10.

“This is a supervisory responsibility of the agency and NCUAshould not seek to write new regulations unless the rules in placeare clearly inadequate,” he added.

McWatters also vowed to continue the push for budget hearings.

“Regrettably, my recommendation for a public hearing on thebudget—that is, receiving input from those of you who actuallywrite the checks that fund the agency—was summarily rejected,” hesaid. “I will continue to advocate for an open budgetary process,because more transparency is better than less, more analysis isbetter than less and more critical thinking and honest debate isalways better than less.”

McWatters invited stakeholders to communicate their issues andconcerns regarding the NCUA budget directly to his office.

“I particularly welcome specific, concrete observationsregarding the budget and the budgetary process as opposed togeneral, vague comments that often offer little in the way ofmeaningful guidance,” he said.

In his remarks, McWatters requested the NCUA board establish atleast three formal advisory committees that advise the board oncertain issues and report their findings to the NCUA Board on aregular basis.

He said the committees would have the mandate to advise theboard about the budgetary process, the agency's examinationprograms and the appeals process as well as areas where the NCUAcould expedite regulatory relief for the credit union communitywithout compromising the safety and soundness of the ShareInsurance 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 acomplete rewrite of the member business lending and field ofmembership regulations,” McWatters said.