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CUNA to Congress Allow CUs to survive thrive under new regs
WASHINGTON (9/24/09)--Reiterating that credit unions did not contribute to the financial crisis, Credit Union National Association (CUNA) Chief Economist Bill Hampel called on the assembled legislators to "ensure that the credit union model is not eroded as a result of the misappropriation of bank regulations to credit union operations."
CUNA Chief Economist Bill Hampel urges a House panel that consumer protection regulation should be “consolidated and streamlined” so it does not add to the regulatory burden of "those that have been regulated and performed well, such as credit unions.” (CUNA Photo)
Speaking during a House Committee on Small Business hearing on “The Impact of Financial Regulatory Restructuring on Small Businesses,” committee chair Rep. Nydia Velázquez (D-N.Y.) said that some of the proposed financial regulatory changes could substantially alter the business models of both community banks and credit unions. Hampel in prepared remarks addressed one such potential change that has been laid out by legislators, saying that the creation of a separate consumer protection examiner outside of the National Credit Union Administration (NCUA) would “distract credit unions from their mission and divert resources away from serving their members.” While CUNA generally supports the concept of consumer protection, Hampel in his remarks called for consumer protection regulation to be “consolidated and streamlined” so as not to add to “the regulatory burden of those that have been regulated and performed well, such as credit unions.”
Speaking during the tommittee hearing, Rep. Nydia Velázquez (D-N.Y.) said that the needs of small businesses must be considered as Congress crafts its regulatory response to the conditions that created the financial crisis. (CUNA Photo)
The NCUA is reportedly developing its own division of consumer protection which will come into effect whether or not Congress elects to create its own Consumer Financial Protection Agency, as has been proposed. Hampel also encouraged the legislators to retain the NCUA as the sole regulator and enforcer for credit unions, saying that maintaining that regulatory independence "extends beyond both philosophical and structural issues." While credit unions themselves cannot solve all of the current economic problems, they can be part of the solution, and Hampel urged the assembled legislators to enact legislation that would “restore credit unions’ ability to serve the lending needs of their business-owning members” by “eliminating or expanding the limit on credit union member business lending.” Such a move would allow credit unions to ease the credit crunch for some members while generating the portfolios needed “to support compliance with NCUA’s regulatory requirements,” he added. CUNA, according to Hampel, would also work with regulators to “facilitate underwriting practices and standards” to ensure that safety and soundness concerns remain at the forefront of member business lending activities.


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