ARLINGTON, Va. – NASCUS intends to cooperate with the House Ways and Means Committee's request for state credit union regulatory agencies to collect specified information on state chartered credit unions, but one of the first issues it has to deal with is differences in 47 state laws concerning what information can be shared with the committee.

In March, House Ways and Means Committee Chairman Bill Thomas (R-Calif.) sent NASCUS a letter requesting state credit union regulators collect data from a representative sample of credit unions they regulate in their state in four areas: membership, executive compensation, credit union service organizations and unrelated business income tax.

In his letter, Thomas cited the oversight the committee is in the process of conducting of the tax-exempt sector including “examining the justification for the tax-exempt status of certain types of entities, and the benefit the public receives in exchange for the tax exemption.”

The chairman mentioned the survey NCUA is conducting at the committee's request of federal credit unions to collect information about characteristics of members, the services provided by credit unions and executive compensation.

“State-chartered credit unions account for approximately 40% of the credit union industry, and like federal credit unions, are exempt from federal income tax. Accordingly, it is important that the committee have an understanding of how state chartered credit unions use their tax-exempt status to serve their members.” Thomas wrote. The deadline for NASCUS and state regulators to provide the requested information is Sept. 1. NASCUS has already held several teleconferences with state regulatory agencies to discuss the committee's request, and NASCUS President/CEO Mary Martha Fortney and NASCUS Chairman Linda Jekel, director, Washington Division of Credit Unions, have also discussed it face-to-face in regional board meetings. In addition, NASCUS has formed a four-person task force to study the issues and determine the most appropriate collection methodology. The task force members include Jekel and three past NASCUS chairmen including immediate past chairman Roger Little, deputy commissioner, Credit Union Division, Office of Financial Insurance Services, Michigan; Jim Forney, superintendent of credit unions, Credit Union Division, Dept. of Commerce, Iowa; and Harold Feeney, commissioner, Texas Credit Union Department.

“There are 47 state laws plus Puerto Rico that govern the regulation and supervision of credit unions,” explained Fortney. “Each state regulator is determining what authority it has or doesn't have, what their state law allows and doesn't. There hasn't been any determination yet whether there are concerns about sharing the type of information the committee has requested.”

Fortney said she's discussed with the committee staff what NASCUS is doing to meet the committee's request, and “they understand it's not just one federal law they're working with. They understand some states might not be able to participate” in providing the committee with the requested information.

Washington State, for example, allows the sharing of information, but that's not necessarily the same with other states.

Fortney said it's “premature” to know what the implications of that will mean.

“I've been talking with the committee staff, and they're with us step-by-step. The committee wants to be kept apprised, and we intend to do so,” she said, adding, “We're hoping for a consistent methodology for collecting and presenting the requested information instead of having 47 different ways. We assume the committee wants it like that.”

In addition to the information NASCUS sent the committee immediately after it received Thomas' letter, NASCUS expects to present the committee with another report this month about its data collection efforts.

In its letter, Fortney stated that the association “will encourage participation from each of the 47 states with state-chartered credit unions.” However, “As the committee is aware, NASCUS cannot mandate participation; however, we can and will act as a clearing house and present the requested data so the representative sample can be provided to the committee in a timely manner and a consistent format.”

“I don't know what the committee is thinking and won't know until we give them the updated information about what's happening on the state level. I think they understand the differences between federal and state law and will take all factors into consideration. I feel confident they're going to continue to understand the state perspective,” said Fortney. -egbarr@earthlink.net

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NASCUS: Varying State Laws Dictate How Much CU Information Regulators Can Share With House, Ways and Means Committee

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