NASCUS Looks at CURIA from Safety and Soundness, States' Rights Perspective

ARLINGTON, Va. — NASCUS is generally supportive of the Credit Union Regulatory Improvements Act (H.R. 1537) with some additions and subtractions, President/CEO Mary Martha Fortney said.“When we look at the legislation, we look at it from a regulator’s position,” she explained. The NASCUS Board recently set a policy statement for thenew CURIA for the110th Congress.On the provision creating a risk-based capital framework, Fortney said, “NASCUS feels it makes sound economic sense…We’re going to be looking at Basel 1a that the other regulators have put out. We have a lot of work ahead of us.”However, on top of this capital reform, NASCUS would like to take capital reform one step beyond a risk-based calculation to the addition of alternative capital sources for credit unions. Fortney added that NASCUS has not promoted a particular form for that to take but is working on a report with Filene on the matter and has formed a task force to make recommendations to the NASCUS Board.She acknowledged that the alternative capital debate is a philosophical one that is going to take some time which is exactly why NASCUS published its white paper on the issue a couple years ago and is working with Filene and studying the issue with its task force. Fortney said that the task force is following a “deliberative process” and will make recommendations in “as timely a manner as we can.”Additionally, NASCUS would like some major changes to the conversion provisions in CURIA, leaving oversight more in the hands of the state-chartering agents. “Transparency in the process is critically important. However…NASCUS believes this is something that should be up to state law,” Fortney advocated. The state issued the charter, she reasoned, so if there is a change in that charter,it should be under thestate’s purview.“We don’t see an insurance nexus,” Fortney stated.NASCUS fully supports other provisions in the bill relevant to state charters, particularly the member business lending provisions to increase the permissible percentage to 20% of assets and raise the minimum business loan threshold to $100,000, so long as individual state exemptions are maintained. These provisions will allow credit unions to better serve their members without threatening safety and soundness, accordingto NASCUS.Exemption from the Clayton Act pre-merger notification requirements–something banks have been granted but credit unions were omitted as an oversight–would also be helpful.–[email protected]