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CUNA seeks CU improvements in Dodds consumer protections
WASHINGTON (3/19/10)--The Credit Union National Association (CUNA) encouraged Sen. Chris Dodd (D-Conn.) to consider adding language that gives his proposed Bureau of Consumer Financial Protection (BCFP) “the authority to delegate examination authority for large credit unions to the prudential regulator” rather than limiting the National Credit Union Administration’s (NCUA) authority to credit unions with under $10 billion in assets. Citing CUNA’s “historic concerns with legislative proposals that seek to divide credit unions by asset size,” CUNA in a letter to Dodd also promoted “permitting the BCFP to delegate examination authority for large credit unions to NCUA.” Such a move “would strike a balance that will ensure an appropriate level of examination for compliance with consumer laws” and ensure that “all credit unions have the opportunity to be examined by their prudential regulator.” “Permitting NCUA to use existing resources to supervise all credit unions for compliance with consumer protection law, and giving the BCFP back-up authority to examine credit unions, would permit the BCFP to devote more of its resources on less scrupulous financial services providers while maintaining the authority to intervene with a credit union in the event that it became necessary,” the letter added. Overall, CUNA spoke in support of the BCFP and many of the regulatory reforms proposed by Dodd’s bill, and called for greater protections for consumers of both regulated and, especially, currently unregulated financial products. However, CUNA in the letter expressed concern at portions of the bill that would require the BCFP “to collect depositor data by census tract,” as this could create an unneeded regulatory and reporting burden for credit unions. CUNA urged Dodd’s Senate Banking Committee “to either remove this language from the Committee Print or modify the language to require the BCFP to coordinate with the prudential regulators regarding the type and form of the data, as well as the method of collection, making every effort to reduce duplicative data collection requirements and overall regulatory burden.” CUNA has previously requested that any regulatory changes that are proposed help reduce the amount of burdensome regulation faced by credit unions, and CUNA commended Dodd for directing the BCFP “to ensure that outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed.” This single agency “would be able to identify and streamline duplicative regulatory requirements, thereby reducing regulatory burdens for credit unions as well as improving consumers’ comprehension of the terms and condition of mortgage loans,” the letter added. CUNA was also pleased by the “structure of the capitalization of the Orderly Liquidation Fund (OLF),” especially portions that ensure that credit union members would “not be asked to provide any funds for the initial capitalization of the OLF.” CUNA also commended Dodd for ensuring that only credit unions with over $50 billion in assets would be charged assessments if the OLF needs to be recapitalized. CUNA staff continues to pour over the 1,330 page bill, and may convey “additional technical concerns with the legislation as it proceeds through Committee consideration,” the letter added.


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