CUNA Says Harper Consumer Protection Plan Is 'Solution in Search of Problem'

The NCUA should focus on safety and soundness issues and its examinations should not be expanded to include consumer protection measures, CUNA said Monday.

“As its mission statement makes clear, the NCUA exists to ensure the safety and soundness of the credit union system and its examination program should remain focused on that objective,” CUNA Chief Economist Mike Schenk, said in presenting the trade group’s position on the agency 2020 budget.

The board is likely to adopt its budget at its Dec. 12 meeting.

Board member Todd Harper has proposed hiring three employees to develop a dedicated consumer compliance exam process for large, complex credit unions.

Harper has said that other federal banking regulators have such tests. He also has said that the NCUA’s policy also differs from the congressionally mandated Federal Financial Institutions Examination Council. That council aims to develop uniform standards for financial regulators.

However, Schenk said there is no demonstrated need for such efforts.

“Absent evidence demonstrating an emerging need or establishing a clear benefit to all credit unions, our members view the proposal as a solution in search of a problem,” he wrote.

He said the agency already has tools in place to evaluate a credit union’s consumer compliance program when it is needed.

And he cautioned against drawing comparisons with other banking regulators, which oversee for-profit banks.

In his evaluation of the budget, NAFCU Chief Economist and Vice President of Research Curt Long called on the agency to consistently conduct cost-benefit analyses for existing the future programs.