Feb. 12, 2013 – NAFCU President and CEO Fred Becker today called on key members of the House and Senate to support the association’s proposed five-point plan for providing broad-based regulatory relief to the nation’s federal credit unions through administrative, capital, structural, operational and data security reforms.
“Federal credit unions are well-managed, well-run institutions whose activities did not contribute to the financial crisis, yet their regulatory burden has reached epic proportions,” said Becker. “NAFCU’s five-point plan provides a solid framework for making meaningful improvements that will reduce the regulatory burden on credit unions so they can continue to do what they do best – provide valued services to their 95 million members throughout the United States.”
Becker detailed NAFCU’s five-point plan in a letter this morning to the House Financial Services Committee and Senate Banking Committee. The plan combines a series of ideas and proposals NAFCU has been promoting for some time with lawmakers and regulators based on input received from member credit unions. These provisions would modernize the Federal Credit Union Act and establish new federal data security requirements. Two NCUA studies are proposed.
Following are the highlights:
- Administrative improvements: NAFCU wants individual federal credit unions, where warranted and within safety-and-soundness boundaries, to be able to seek parity under broader state rules. It seeks a required cost/benefit analysis of rules and rule fixes if costs are unexpectedly high. It also wants NCUA to have time to address the potential ill effects on credit unions from CFPB rules. It also seeks better access for credit unions to the Central Liquidity Facility.
- Capital reforms: NAFCU proposes that NCUA, with input from the credit union industry, conduct a study on prompt corrective action and report recommended changes to Congress. It also wants the agency to modernize capital standards to include, among other things, access to supplemental capital for some institutions and a risk-based net worth requirement that accounts for material risks.
- Structural improvements: NAFCU is continuing its long-standing push for enhancement of the federal charter for credit unions. It is urging, among other things, that Congress direct NCUA, with input from the credit union industry, to study and report back to Congress its suggested changes to corporate governance rules. It also seeks an improved field-of-membership expansion process and more flexibility for credit unions that merge or that seek to serve underserved areas.
- Operational improvements: The association is seeking greater member business lending authority for credit unions, removal of yearly mailings of privacy notices when policies do not change, revised investment powers, more-flexible loan rules, federal share insurance for Interest on Lawyers’ Trust Accounts.
- Data security reforms: NAFCU is seeking legislation that would, among other things, hold merchants accountable for the costs of data breaches on their end; set national standards for safekeeping of all financial information; require merchants to disclose their data security policies to customers; require timely disclosures in the event of a breach.