ARLINGTON, Va. – CUNA and the credit union movement must make a simultaneous major investment in updating state credit union laws and regulations, as it does for federal credit unions, advises NASCUS. Otherwise state credit union regulators and state-chartered credit unions risk being left with outdated powers and lessened opportunities. NASCUS' words of caution to CUNA in its comment letter on the Renaissance Commission report advised the association against inadvertently creating a disadvantage to state chartered CUs as a result of the push to update regulations for federal credit unions. "We are concerned that industry resources will be diverted toward regulatory and legislative changes for federal credit unions without equivalent direction toward state credit unions. That is possible, and almost probable, simply because there is the opportunity for passage of an omnibus financial institutions bill during the term of the 107th Congress. The result could disadvantage the state system by leaving it with outdated powers and diminished opportunities to serve members of state credit unions," wrote NASCUS President/CEO Doug Duerr in his Aug. 23 comment letter to CUNA. Consequently, NASCUS urges "CUNA's leadership and management to create a strategy to assure that simultaneous considerations occur at the federal and the state level, and that resources are equally available to support CUNA's legislative and regulatory agenda in Congress and in the 47 states and Puerto Rico." Duerr emphasized to Credit Union Times that "NASCUS is not being critical of the Renaissance Commission's undertaking nor CUNA. It's very clear from its report that the Renaissance Commission considered issues affecting state-chartered credit unions as well as federal credit unions. The report was inclusive of issues affecting the entire credit union movement." In fact, Duerr made it clear in his letter NASCUS' recognition and appreciation of the effort by CUNA and the Renaissance Commission "for embarking on a process that was thought provoking, carefully developed, and very inclusive. In our view, the outcome also earns CUNA and the Commission kudos. The report reflects the most comprehensive inventory of the credit union movement's future needs ever compiled." Duerr, however, continued to explain that, "It's just that it's critical that the balance of the dual chartering system is maintained, and that state legislatures don't wind up having to play catch up with updating state credit union rules and regulations so they're comparable to what federal credit unions have. Our concern is that the credit union movement reacts quickly on making changes beneficial to federal credit unions, and then at some point in the future comes back to making changes for state-chartered credit unions. These improvements should be pursued on a dual track." Duerr noted that NASCUS Credit Union Council Vice Chair Loren Rush, president, Universal One CU, Dayton, Ohio, addressed this point in her testimony to the Renaissance Commission during its first hearing, Oct. 2, 2000 in Chicago on the position of the NASCUS Credit Union Council. Among the comments Duerr put forth in NASCUS' comment letter: * "NCUA's Title I, Title II and Title III responsibilities deserve separate evaluation and deliberation by the NCUA Board and staff." It's important, said Duerr, that the NCUA Board not "co-mingle its judgment. It's fundamental that NCUA should have a separate agenda for Title I, II and III policies, to avoid having the policies clouded. There should be a separation of responsibilities and the decision-making process." * Regarding the Renaissance Commission's recommendation that the credit union movement must support decisions made by state legislature that allow state-chartered credit unions in their respective states to be privately insured, NASCUS agrees that SCCUs should be allowed to choose non-federal share insurance as an alternative to the NCUSIF. * Regarding the overhead transfer rate, NASCUS agrees with the Commission's position that the recent increase in the OTR from 50% to 67% "raises real concerns that the NCUA is defining too many of its activities as pertaining to `insurance' and consequently overcharging the NCUSIF for insurance-related, supervisory activities." "CUNA needs to identify what its legislative agenda will be for Congress. Then it should do an evaluation of state acts to determine which states' laws may not allow for similar opportunities for state-chartered credit unions and assist leagues in developing similar agendas for working with their state legislatures," said Duerr. "CUNA has the same responsibility to work with state leagues to update state laws and regulations, as it has to work with Congress regarding federal credit unions." Duerr emphasized he was not suggesting that "there is any intent by CUNA to compromise state-chartered credit unions' concerns for federal credit unions', but it could be an unintentional outcome of the Renaissance Commission's recommendations." "The credit union movement has to make sure that four years from now, the state-chartered credit union system doesn't find itself in the same position as federal credit unions find themselves today because of outdated powers and regulations," Duerr said. – [email protected]

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