WASHINGTON — Consolidating some of the financial regulatory functions under the Treasury Department would decrease state input into the policymaking process and circumvent the intent of Congress, NASCUS and two other organizations representing state financial regulators wrote President Bush.
At issue is a proposal in the Treasury Department's recently-issued Blueprint for financial regulation to give greater regulatory oversight to the President's Working Group on Financial Markets, which is part of the department.
NASCUS Chairman George Reynolds and his counterparts from organizations representing bank and thrift institution regulators said the proposal would diminish the authority of the Federal Financial Institutions Examination Council, an interagency organization, which includes representatives from state regulatory agencies.
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"While greater coordination is needed to enhance market stability, we believe lies in enhancing our existing model of federalism, as created by the Constitution of the United States, and preserved by Congress in the centuries that have followed," the state regulators wrote Bush.
The Blueprint is a comprehensive restructuring of financial regulation that has raised concerns among credit unions that fear their existence could be jeopardized if they were regulated by the same agency as banks.
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