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Credit unions should use the debate over financial regulation to highlight their strengths while preparing for a system that might feature one large agency that regulates financial services.That’s the conclusion of a report by the Filene Research Institute analyzing the regulatory restructuring ideas being discussed by the Obama administration and Congress.Because of the recession and the failure of key sectors of the financial services industry, there is a push to revamp the current regulatory structure which the report described as a “complex web of interrelated but uncoordinated organizations.”But the report noted that the academic literature is “inconclusive and scant,” about the relationship between the structure of regulatory agencies and the safety, soundness and performance of the financial sector.Credit unions have the “moral high ground” to promote a regulatory structure that allows them to keep operating as is, but they should be prepared for vast changes in the overall system, including the existence of one regulator for all financial services providers.“While I don’t expect credit unions to wither up and expect a new regulatory structure, it may be wise to prepare for a single regulator scenario,” wrote Filene’s Chief Research Officer George Hofheimer, the report’s author.Lawmakers and administration officials are discussing the regulatory changes, and there could be legislative action later this year. However, it’s not clear which agency will be empowered to regulate systemic risk. And it also remains to be seen if that agency would also possess day-to-day regulatory oversight over credit unions and other financial institutions, or if that regulator would just deal with big-picture issues and leave agencies, such as NCUA, as is.–[email protected]

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