The expansion and contraction of financial regulation often follows the arc of a pendulum, a slow and ponderous trajectory that is invariably drawn backwards as tempers cool and confidence in the financial sector exerts its influence. After the financial crisis, the forces pushing the pendulum in the direction of complex regulatory standards were born out of fear and distrust of large banks. However, credit unions were also swept up in the whirlwinds of the Dodd-Frank Act, despite having played no part in the financial crisis. Since that time, credit unions have been waiting for the pendulum to swing back in the other direction and for the stifling regulatory environment to loosen. At NAFCU, we have been working on creating a better regulatory environment in 2017 and beyond.

The Stop Watch

President Trump has wasted no time setting the stage for a vast rollback of regulations. On Jan. 20, the president issued an executive order calling for regulators to reduce regulations and control regulatory costs. The president also asked agencies to review recently issued regulations to determine if they can also be eliminated. The White House has since issued interim guidance clarifying that not all regulations are necessarily on the cutting board; proposals that are aimed at easing regulatory burden will be evaluated under a "net cost impact" analysis to determine if they must be offset. The NCUA has had a great start recently in eliminating unnecessary or burdensome rules, and we believe that Acting Chairman J. Mark McWatters has correctly characterized new field of membership and alternative capital proposals as regulatory relief. However, there is certainly more to be done to ease costs on credit unions, particularly with respect to new risk-based capital standards.