April 08, 2014

Berger: NCUA can do more to reduce reg burden

April 9, 2014 – NAFCU President and CEO Dan Berger challenged NCUA's claims in a hearing Tuesday that 70 percent of its new rules since 2013 have provided regulatory relief or greater clarity without adding to credit unions' compliance costs. He said NCUA can do much more.

"NCUA is seriously underestimating the impact of regulatory burden. Much more can be done to provide regulatory relief to credit unions," said Berger. "Contrary to NCUA's stated aim, [the agency's] risk-based capital rule will be one-size-fits-all and create significant burdens because it will force all credit unions to adjust their capital, not just the 3 percent of credit unions NCUA currently estimates would be downgraded under the proposed rule."

Tuesday's hearing, "Who's In Your Wallet: Examining How Washington Red Tape Impairs Economic Freedom," held by the House Financial Services Committee, heard from panelist from NCUA, CFPB, the Federal Reserve Board, FDIC and Office of the Comptroller of the Currency. The hearing evaluated these regulators and their regulations' impact on economic freedom. Many committee members aired concerns generally about regulators' tendency toward one-size-fits-all rulemaking.

NAFCU submitted its own written statement to the committee ahead of Tuesday's hearing. NAFCU focused on credit unions' concerns over NCUA's risk-based capital proposal. NCUA General Counsel Mike McKenna was questioned on the proposed rule. The association also highlighted the need for other reforms, many of them noted in NAFCU's "dirty dozen" list and five-point plan for regulatory relief.

NAFCU has recently released a guide of talking points to help member credit unions in preparing their comments to NCUA on the capital proposal; comments are due May 28. NAFCU's regulatory and research teams also recently did a video for credit union members outlining key aspect of the proposed rule and NAFCU's net worth risk-based calculator.

A NAFCU webcast on Thursday, "Risk-Based Capital Rule: How NCUA's Proposal Will Impact You," will also discuss NCUA's proposed rule further. The webcast begins at 2 p.m. Eastern.

Tuesday's hearing addressed issues besides risk-based capital, including recent claims of employment discrimination at CFPB and bureau rules regarding auto lending, small-dollar loans and new qualified mortgage rules.

Also discussed throughout the hearing was "Operation Choke Point," a federal Financial Fraud Task Force initiative set to go after predatory payday lenders through the financial institutions that do business with them. NAFCU joined with other financial services trades and issued a joint statement on "Operation Choke Point" that was submitted to the House committee Thursday night in conjunction with yesterday's hearing.