Newsroom

September 16, 2014

NAFCU responds to NCUA on CUs' reg burden

NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt countered several points made by NCUA in testimony posted for today's hearing, "Examining the State of Small Depository Institutions."

Hunt's responses address NCUA's statements on what is behind the decline in small credit unions, the impact of the agency's risk-based capital proposal and the agency's desire to have direct examination authority over third-party vendors working with insured credit unions:

  • Decline of small CUs: Says Hunt, "The extraordinarily challenging regulatory environment has played a significant part in the decline of small credit unions and continues to exacerbate the demands on small credit unions." She notes the loss of 1,025 federally-insured credit unions since the second quarter of 2010 – following implementation of the Dodd-Frank Act and creation of CFPB.
  • Risk-based capital proposal: Hunt challenged NCUA's statement that only credit unions with $50 million or more in assets would be affected by this proposal. "Credit unions with more than $50 million in assets will have to carefully examine their balance sheets and potentially make substantial portfolio changes based on the proposed rule," she says. NAFCU has estimated credit unions would need to hold $7.1 billion more in capital to maintain their current capital cushion.
  • NCUA's bid for third-party vendor examination authority: Hunt said NCUA's assertion that regulatory relief for small credit unions would accompany such authority for the agency is "highly questionable." She said NCUA is already authorized to regulate credit unions and their third-party relationships "and relies on an anomaly to justify an expensive regulatory regime that will not result in a safer or more sound system."