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Commentary

Small Is Small: A New Approach to Credit Union Regulation

A three-tier regulatory system would provide meaningful regulatory relief to credit unions.

By J. Mark McWatters | Updated on October 06, 2015
Last week, by a bipartisan margin of 50-9, the House Financial Services Committee sent an undeniable message to the NCUA: Take more time to review the law, assess the need for additional regulation, evaluate alternatives and consider the real impact now and into the future before moving ahead with the Risk-Based Capital 2 final rule.

This is a message I welcomed and championed in my written dissent (available on the agency’s website) to the issuance by the agency of its proposed RBC2 rule last January as contrary to a plain reading of the Federal Credit Union Act.

I think the agency would do well to heed this message for other major regulatory issues as well, most notably how the agency deals with the growing regulatory burden confronting credit unions, particularly small credit unions. The increasing number, scope and costs associated with regulatory requirements, not just from the NCUA but from all agencies, that credit unions must manage is a concern that the NCUA must take more seriously and devote more resources toward addressing in a meaningful way.

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