Trade organizations have submitted their regulatory wish lists to the NCUA as the agency prepares to undergo its annual rule review.
CUNA made 17 recommendations that cover a wide spectrum, including business loan flexibility, continuing to postpone proposed rules on loan participations, streamlining merger and FOM changes, treating interest on lawyers trust accounts (IOLTAs) as fiduciary accounts for share insurance purposes, and expanding the definition of “small credit union.”
“Regulators have many tools at their disposal and there are many steps that agencies could take to mitigate regulatory burdens for credit unions,” said CUNA President/CEO Bill Cheney in a letter to NCUA Chairman Debbie Matz. “We urge NCUA to be as proactive as possible, consistent with statutory requirements and reasonable safety and soundness expectations, to mitigate regulatory requirements for credit unions.”
CUNA also recommended the NCUA form an advisory council, which would discuss problem areas and trends and help identify regulatory burdens, barriers and incentives. The group could also serve as a useful sounding board as the agency develops proposals and directives for the credit union system, Cheney said.
Legal counsel Mary Dunn said CUNA will follow up with the NCUA, meeting with officials there to pursue the trade's requests.
NASCUS, meanwhile, suggested recommendations that would benefit the state credit union system, including providing parity in some areas of NCUA's regulations and a consolidation of insurance rules in Part 741.
“NASCUS continues to take every opportunity to preserve and protect state authority in the oversight of state-chartered, federally insured credit unions,” said NASCUS President/CEO Mary Martha Fortney. “Our comments for this year's Regulatory Review highlight a few areas where state law should be reinforced in the supervision of state charters.”
First, NASCUS continues to encourage the NCUA to consolidate all insurance rules in Part 741 of NCUA's Rules and Regulations. Federally insured, state-chartered credit unions must reference rules in both Part 741 and in applicable rules incorporated by reference in areas for federal credit unions.
Regarding loan participation regulations, NASCUS recommends eliminating the requirement of regional director approval when purchasing a loan participation interest at an institution not insured by the share insurance fund. This provision is more restrictive toward state-chartered credit unions than for federal credit unions.
“There is no compelling reason for the different standards for state and federally chartered institutions with respect to participation loans,” NASCUS stated in its letter. “NASCUS recommends NCUA streamline the rules regarding loan participations to apply equally to state and federal credit unions.”
Additionally, NASCUS suggested the agency make parity changes to Part 701.21, Loans to Members and Lines of Credit to Members, to align it with the treatment of state Member Business Lending rules in Part 723.20. NASCUS also recommends parity changes in 701.32, Payments on Shares by Public Units and Nonmembers, and encouraged the agency to include exemption language and defer to state law for certain areas of its conversion and merger rules.
The NCUA reviews all its existing regulations every three years, with the Office of General Counsel maintaining a rolling review schedule that identifies one-third of existing regulations for review each year.
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