Earlier this week, an NCUA 2013 White Paper, "National Credit Union Share Insurance Fund (NCUSIF) Improvements," was released to the public outlining the agency's legislative pursuit for broadening its authority to administer the NCUSIF. This paper is clearly yet another piece of NCUA's agenda for mitigating perceived risks within credit unions – an agenda the agency continues to keep credit unions in the dark about, despite multiple requests from stakeholders, such as NAFCU.
Since 2013, we have seen the NCUA roll out various initiatives to address the same perceived risk in our industry. These include the agency's current risk-based capital proposal and its recent final rules on emergency liquidity and stress testing. As if these regulatory regimes weren't enough, the NCUA is now turning its attention to the Hill to seek broader authority to administer the NCUSIF, including the ability to assess risk-based share insurance premiums. The one common factor among all these initiatives is that credit unions were the last to know.
Prior to the white paper's release, the NCUA's legislative pursuit for reforming the NCUSIF was only publicly revealed as a buried footnote in the agency's recent testimony before the Senate Banking Committee. Credit unions deserve a more open and transparent relationship with their regulator. They deserve a chance to be part of the discussion, rather than have it dictated to them in a rulemaking or legislation.
If the NCUA were to ask credit unions what they thought about the agency's various risk-mitigation initiatives, the agency would hear a resounding, "where's the justification?" Credit unions are extremely safe and sound, and they weathered the financial crisis better than any other industry. Even as the financial market heals, credit unions remain conservative and do not pose the risk that the NCUA seeks to mitigate.
NAFCU and our members acknowledge the importance of safety and soundness in the credit union system, which is why we stand ready to work with the agency to develop workable solutions to actual problems if they arise in order to ensure that our industry continues to grow safely. To foster this relationship, NAFCU believes credit unions need clearer disclosures of the agency's plans, especially those that would address perceived risk in the credit union industry.
Simply put, the NCUA, as the steward of the credit union industry, should promote an open and transparent environment. The agency's clarity would go a long way to help alleviate credit unions regulatory burden and improve their ability to plan for the future.
Alicia Nealon
Director of Regulatory Affairs
NAFCU
Arlington, Va.
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