Some touched on major issues but included unclear references. The NCUA was asked about these, and CU Times is awaiting its response.

CU Times discussed parts of Hauptman’s list with two members of the lobbying team at America’s Credit Unions (AmCU): Carrie Hunt, chief advocacy officer, and James Akin, head of regulatory affairs.

The first two priorities in Hauptman’s list seemed clear: “Re-examining the current NCUA budgeting process” and “Convening groups of NCUA employees to identify achievable internal efficiencies to reduce unnecessary frictions in the agency’s operations.”

Hauptman has said in the past the best uses of credit union money are with members or pooled in the Share Insurance Fund to mitigate potential shortfalls in a financial crisis. He has said its least valuable use is beefing up the agency's budget.

Not surprisingly, limiting money credit unions send to the NCUA for its operating budget received praises from Hunt and Akin.

Hauptman’s fourth point seemed to address the burden of regulatory compliance: “Focusing on true financial inclusion, which means removing barriers to de novo credit unions and removing the ‘pain points’ that have led to fewer and fewer small credit unions. NCUA should be mindful that the only people who think compliance is easy are those that don’t have to do it.”

Minimizing the costs of regulatory compliance? That’s singing from the hymnal of credit union trade groups.

The fifth point is “codifying our procedures to protect Americans from regulation-by-enforcement. For example, no enforcement action should ever set — even clarify — policy. In America and other free societies, the sequence is: set speed limits, then give speeding tickets (no one has any obligation to be aware of someone else’s ticket).”

On the speeding ticket reference, is Hauptman saying the public has no right to know when the NCUA uses its government powers of enforcement? CU Times is awaiting clarification from NCUA on this point.

But Hunt and Akin at AmCU saw the first part of that point as stating something it and its predecessors have long complained about: Sometimes the NCUA is vague in its regulations, and board members make statements that suggest certain actions might create reasons for NCUA review and sanction, without specifying what those actions would be.

“We’ve frequently told the regulators and the NCUA that financial institutions should have clear rules of the road about the types of acts and practices that they should or should not be engaging in,” Akin said.

“I think Chairman Hauptman recognizes that when it’s unclear to financial institutions what their obligations are, it can chill innovation and growth,” Akin said. “And it’s simply unfair for an institution to be subject to enforcement that has not been laid out by regulation.”

Hauptman’s seventh point seemed to comment on another aspect of ambiguity trade groups have complained about.

The seventh point was “re-assessing NCUA policies that may, even inadvertently, dissuade credit unions from serving low-income areas. This includes language around overdraft policies, particularly for credit unions located in states with especially punitive government late fees/penalties.”

The overdraft policy is still a fresh debate. Board Member Todd Harper sent out a research report on overdraft fees in his final week as chair warning that some credit unions were relying too heavily on overdraft and non-sufficient fund fees, which could potentially create safety and soundness issues. Harper sent out a more detailed letter Dec. 10, walking credit unions through various new rules from the CFPB and stating where credit unions might be vulnerable to enforcement action.

For example, Harper wrote: “High or no daily limits on the number of fees assessed. Charging overdraft or NSF fees with a high limit, or without limit, for multiple transactions in a single day result in high costs for members and difficulty in bringing accounts positive. Such practices increase consumer compliance and reputation risk and are likely unfair under both the FTC Act and the CFPA."

Akin said the “fairness doctrine” is something the CFPB is responsible for enforcing among credit unions with $10 billion or more in assets. But NCUA is responsible for enforcing it among the vast majority of credit unions of lesser size.

Hunt said statements made by Harper urging credit unions to curtail overdraft fees might scare away risk-adverse credit unions.

The result is that a “financial institution has to make a decision whether or not to continue on with the practice when it may be perfectly legal to do so because they’re concerned of potential regulatory retribution,” Hunt said.

The Defense Credit Union Council sent CU Times an email response to Hauptman’s list, saying it welcomed “a ‘right-sized’ regulatory approach from the NCUA. “

“While we recognize the importance of maintaining a strong and consistent safety and soundness framework,” it said, “we believe that common-sense oversight, paired with an understanding that credit unions share the NCUA’s commitment to serving our members, would enhance the overall effectiveness of the credit union system.”

Hunt said AmCU is urging the NCUA to create an advisory committee of credit unions.

“While there shouldn’t necessarily be a friendship between the regulated and the regulator, there should be a good working relationship so that ultimately the rules and regulations that get put in place protect the safety and soundness of the system, but reflect true business practices and reflect how credit unions operate,” Hunt said.

Contact Jim DuPlessis at [email protected].