One of the things I remember growing up was the monthly newsletter my parents would receive from our congressman, the late Edward J. Derwinski. He would end each correspondence with the saying, "Remember, no one wielded a scepter more powerful than a person who picks up a pencil to write his congressman."
Perhaps today we would not use a pencil. It might be a pen but probably an email would be the chosen means of communication.
Recently, the NCUA put out for comment and announced proposed rule 12 CFR Parts 700, 701, 741 and 750, definition of troubled condition. Specifically, the rule proposes to change the definition of a state-chartered federally insured natural person credit union as troubled if either the state or federal regulator assigns it a CAMEL or CRIS code 4 or 5 composite rating. The reasoning is to guard against a ratings discrepancy as a precaution to protect the insurance fund. Ratings would then be consistent for all federally insured credit unions.
Since the public announcement of the rule making, there have been extensive comments and quotes in the trade publications from individuals and associations opposed to such a revision to the rule. Some feel it preempts state authority, diminishes state rights and is an over extension of federal authority.
As a former state regulator and firm believer in state rights, I have read, with great interest, the various public comments on the issues and understand some of the concerns raised. Knowing that there may be better ways to write a rule and other things to take into consideration, the NCUA board invites and welcomes comments, ideas and suggestions by anyone who wants to take the time to express their views and thoughts.
It is because of public comments changes were made to the reg flex and troubled debt restructuring rules that resulted in rules better suited to the needs of credit unions.
It is because of public comments, the CUSO and loan participations proposed rules were put on the shelf for rethinking and reevaluation.
Rulemaking is a process that the NCUA board takes seriously. All of its members are committed not to stifle the creativity and innovativeness of credit unions by burdening them with excessive and unneeded regulation. But they also are committed to a safe and sound credit union industry and strong insurance fund. That is why you must write those letters and send those emails.
Remember, no credit union advocate ever wielded a sword mightier than their computer when they sit down to email their regulator. I think Rep. Derwinski's quote was better, but you get the point.
Michael E. Fryzel
Board Member
NCUA
Alexandria, Va.
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