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March 20, 2017

NAFCU testifies today on CU chartering, reg relief

Keith Stone, president and CEO of The Finest Federal Credit Union in New York, N.Y., will testify on behalf of NAFCU today on the need for regulatory relief and the challenges faced by newly chartered financial institutions.

Stone, whose credit union is headquartered in New York, N.Y., is testifying before the committee in today's hearing, "Ending the De Novo Drought: Examining the Application Process for De Novo Financial Institutions," which begins at 2 p.m. Eastern.

He will discuss the process his credit union went through when it received its charter from the NCUA in 2015. He will also discuss the current regulatory burden faced by today's credit unions, the Federal Credit Union Act and governance modernization.

"Starting a new credit union is essentially an altruistic endeavor, as there is no ultimate financial incentive for those who are successful," Stone notes in his testimony. "Furthermore, the complex chartering process may seem relatively easy and straightforward when compared to what a de novo credit union will face once it is chartered and operating. The industry has seen a significant decline in the pace of de novo credit unions post-Dodd-Frank enactment."

"Our current charter powers limit us to small loans and deny us the powers necessary to fully serve our member needs," he continued. "While we fully understand the safety and soundness concerns usually faced by new credit unions, we have significant capital".

Stone will discuss how the chartering process could be improved, including through the passage of H.R. 1244, the "Capital Access for Small Businesses and Jobs Act," which would authorize all credit unions to issue supplemental capital as long as it does not alter a credit union's cooperative ownership structure, and updates to field of membership restrictions and outdated governance provisions in the Federal Credit Union Act.