BOSTON – Despite the rough patch that the credit union movement has faced, its future is bright if it makes some changes to its structure and seizes opportunities.
That was the consensus of a panel of credit union veterans who discussed the subject at the closing session of NASCUS' State System Summit.
GTE Federal Credit Union President/CEO Bucky Sebastian said given credit unions' strong record of helping people during the recession, the movement should get help from regulators to continue and expand their efforts.
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Sebastian said he is an "eternal optimist," about getting NCUA to recognize his plan for restructuring credit unions by creating a hybrid charter. Under his plan, federal credit unions would have the option of getting a new charter in which they would be called federal financial service cooperatives that would be like credit unions in that they pay dividends to members and are run by volunteer boards.
They would be different in that they would have unlimited business lending and mortgages and have access to capital markets. His plan would also make credit unions subject to taxation for earnings in excess of expenses for operating expenses, dividends and reserves beyond 12% of assets.
He added that "it's a crime" that the big banks, "which are fueled by greed," have been given help while credit unions have mostly had to fend for themselves.
"Everyone has to wake up and think differently. We are the answer to what Congress is looking for in terms of helping consumers."
Former Kentucky regulator Ella Robinson said the regulatory restructuring proposals that Congress is considering are a mixed bag for state-charted credit unions.
She is pleased that the dual chartering system is kept the same and the NCUA would remain an independent agency
But she is disappointed that the proposed council of systemic risk doesn't include either a representative of NCUA or of state regulators.
She also said it remains to be seen if the proposed agency to regulate consumer financial products "will make order out of compliance chaos or just add to the regulatory burden."
Association of Corporate Credit Unions Executive Director Brad Miller said he hopes the NCUA's proposed rules for corporates won't represent an overreaction to the problems. He said he expects there to be limits on what areas investments are concentrated.
American Association of Credit Union Leagues Executive Director Susan Newton said the movement needs to form a consensus to solve problems such as the debate over supplemental capital.
"It's easier for one lone voice to kill something," she said. "There are huge opportunities out there but we need to be willing to work together."
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