NASCUS Speaks Out Strongly Against Federal Regulation Through Insurance Fund

WASHINGTON-Mary Louise Preis, Maryland commissioner of financial regulation and NASCUS Board member, spoke out tenaciously against NCUA strong-arming its way into regulating state chartered credit unions through the insurance fund. “We need to ensure that state chartered credit unions have their view in decisions the agency makes about the share insurance fund,” she said during a presentation at CUNA’s Governmental Affairs Conference last week. Preis advocated for reform at NCUA to stop “abuse” of the insurance fund to pry federal fingers into state chartered credit unions’ doors. She also discussed the need for states to have a private insurance alternative, because the agency blurs the lines between the dual chartering system by regulating through the National Credit Union Share Insurance Fund. She called the private insurance option a “fundamental states rights issue.” The NCUA Board members recently wrote the Colorado regulator advising against permitting private insurance in his state. Preis also argued that NCUA should be downsized and that spending from the insurance fund should be curtailed. She pointed out that it is counterintuitive to have to continually pay into a self-maintained fund. She referred to the overhead transfer rate, currently set at 62%, which is the amount of NCUA’s budget paid by the insurance fund for “insurance related” expenses. The Maryland regulator also discussed the need for credit unions to be able to raise secondary capital to be counted toward their Prompt Corrective Action requirements. Preis said that as it stands, PCA discourages growth. “It’s unheard of anywhere else in the financial services marketplace,” she said. [email protected]