A new report on reorganizing and simplifying the federal financial regulatory system left the NCUA off a list of independent financial regulators that would set financial policy over the most systemically-sensitive institutions and corporations.
The report, issued by The Volcker Alliance, a public policy organization headed by former Federal Reserve Chairman Paul Volcker, also stated the Securities and Exchange Commission and the Commodity Futures Trading Commission would merge; an overarching Prudential Supervisory Authority closely tied to the Federal Reserve would be created; and the Federal Stability Oversight Council would establish a Systemic Issues Committee.
Members of the SIC would vote on which institutions and corporations could vote on designations of systemically-important financial institutions, and risky activities and practices. The SIC would comprise the chairmen of the Federal Reserve and the FDIC along with directors of the FHFA and the CFPB, the chair of a newly-created Investor Protection Capital Market Conduct Regulator (which combines the SEC and the CFTC), the director of the Office of Financial Research, and a state insurance commissioner designated by the state insurance commissioners.
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It would not include the U.S. Secretary of the Treasury nor the NCUA.
"As noted above, the secretary of the Treasury would not be a member of the SIC, to maintain its independent federal agency composition," the report said. "The secretary of the Treasury would remain as the chairman of the FSOC, playing an important coordinating role especially in dealing with crisis situations. The chair of the NCUA would likewise not become a member of the SIC. The NCUA does not have a financial stability mandate or supervisory or regulatory authority over any financial institution requiring enhanced prudential standards necessary for maintaining financial stability."
The report did not recommend doing away with the NCUA.
"Even as America continues its long climb back from the financial crisis, it is all too clear that the Federal financial regulatory system needs restructuring to deal effectively with the threats to financial stability," Mr. Volcker said in an announcement of the report. "We urge Congress, the administration, existing regulatory agencies and financial institutions themselves to step up to the needed debate and set out an agreed framework for reform suitable for the 21st century."
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