Linda ChildsI'm proud to be apart of TNConnect Credit Union. Established in 1924, when a groupof postal employees chartered the Knoxville Post Office CreditUnion, we are now the oldest existing credit union inTennessee.

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TNConnect offers a full range of financial products: savings andloans, checking and credit cards. We are committed to serving ourmembership as a trusted, safe and sound financial partner.

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But I worry about our ability to fulfill that vision in the faceof ever increasing regulatory burden. I am not alone in thatconcern.

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As a state-chartered credit union active, and serving in theNASCUS advisory leadership, I am accustomed to talking withregulators. I understand that both state and federal regulatorshave an essential role to perform within the credit union system.To be completely clear, I support my state regulator, welcomediligent supervision and examination, and believe in the regulatoryframework underpinning our movement. Yet, too often, our concernsregarding regulatory burden are dismissed by some as a desire toavoid all regulation.

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Regulatory burden is real and is slowly crushing the creditunion movement. Particularly for those of us who are moderatelysized, the cost and complexity of regulation are driving an everincreasing redirection of resources, both human and financial, awayfrom daily service to our members to backroom compliance. I know myown state regulator understands this, and has stated his commitmentto the vision that his responsibility is to ensure a competitiveand viable regulatory framework that provides an opportunity tosucceed. I commend this approach. I urge all regulators to embracethat vision.

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To ease regulatory burden in a meaningful way, the NCUA and allregulators should perform a meaningful cost-benefit analysis ofoutstanding regulations and modify or eliminate those that proveunnecessary or unduly burdensome. Regulators should ask, “How arethese making credit unions safer? Is there a better way to achievewhat these rules are trying to do?”

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Regulators should ask themselves whether the regulation is goingto be effective in the real world in which credit unions operate.Regulators must also appreciate that asset-based regulations cast afar broader shadow than the technical threshold.

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As a $48 million asset credit union, TNConnect must manage toall of the NCUA's rules applicable to credit unions $50 million andabove for obvious reasons. In Tennessee, we have the option tocompensate our directors. At TNConnect, we have chosen to continueto operate within the tradition upon which we were founded withdedicated volunteers. As I look at over the regulatory framework, Isee ever increasing requirements for the board and wonder how muchlonger we can expect volunteers to keep pace with theseregulations.

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This year, the NCUA has a real opportunity to make stridestoward a system of smart, streamlined regulation. In addition tothe annual review of one-third of the NCUA's regulations, theagency is voluntarily participating in the Economic Growth andRegulatory Paperwork Reduction Act review, which is designed toeliminate unnecessary legislative and regulatory requirements offederal financial regulators.

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While I congratulate the NCUA on its participation in theseexercises, I challenge the agency to set a new standard forsuccess. I hope the NCUA will tackle projects that save precioustime and resources, making a real difference to credit unions ofall sizes, like reorganizing its regulations to incorporate all ofits share insurance rules applicable to state credit unions in oneplace. I understand there are considerable hurdles to achievingthis type of substantive reform, but as the pace of federalregulation continues to accelerate, it is more important than everto try, and to try now. Thoughtful regulatory reform will mean thatmore of the money we spend can be used to help our members or buildcapital.

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Linda Childs is president/CEO of TNConnect Credit Union inKnoxville, Tenn., and chair-elect of the NASCUS AdvisoryCouncil. She can be reached at 865-246-6602or [email protected].

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