ARLINGTON, Va. (4/8/09)--The National Credit Union Administration (NCUA) should enhance supervision, tighten regulatory standards for the corporate system and assess risk problems before addressing structural changes, the National Association of State Credit Union Supervisors (NASCUS) said in a comment letter Friday. NASCUS filed comments regarding NCUA’s Advanced Notice of Proposed Rulemaking on Part 704, Corporate Credit Unions. NASCUS urged NCUA to:
* Resist a rush to judgment on restructuring the corporate credit union system; * Explore if a lack of proper application of regulation and oversight contributed to the current events; * Avoid labeling all credit unions as unsophisticated by unilaterally declaring some activities as too complicated and risky for any credit union; and * Preserve equal opportunity for all corporates to compete so long as they remain safe and sound and retain member support.
NCUA should find what flaws exist in the corporate system and request that the NCUA Office of the Inspector General perform a material loss review, the state regulators’ group said. The agency also should discuss with state regulators how regulatory systems can improve oversight, identify systemic risk factors, and create an examination team of state and federal regulators to concentrate on systemic risk in the corporate system, NASCUS said. NASCUS cautioned against regulation that would unnecessarily or negatively impact safe and sound corporate credit unions that have properly managed their investments and remain fully supported by their members.