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State regulators oppose blueprints exec order
WASHINGTON (6/13/08)—State financial regulators told President George W. Bush this week that an Executive Order proposed in the U.S. Treasury’s Blueprint for a Modernized Financial Regulatory Structure would diminish the interagency regulatory cooperation provided through the Federal Financial Institutions Examination Council (FFIEC). The result of the Executive Order, which would expand the scope and authority of the President’s Group on Financial Markets, would be to circumvent congressional intent that established FFIEC as the primary forum for interagency coordination, the regulators said in a joint letter to the President. The letter was signed by the he National Association of State Credit Union Supervisors, the American Council of State Savings Supervisors, and the Conference of State Bank Supervisors. The three organizations have representatives on FFIEC’s State Liaison Committee. “The Congress has organized the FFIEC as the proper mechanism for financial policy coordination and interagency regulatory cooperation. The FFIEC is best positioned to draw upon federal and state expertise to enhance financial market integrity as it pertains to depository institutions,” NASCUS Chairman George Reynolds and his bank and thrift counterparts wrote. The letter added, “An expanded and broader role for the President’s Working Group will make the FFIEC irrelevant, as policy development shifts to the purview of the Treasury Department. While greater coordination is needed to enhance market stability, we believe the solution lies in enhancing the strengths of our existing model of federalism, as created by the Constitution of the United States, and preserved by Congress in the centuries that have followed.” The Credit Union National Association (CUNA) has lobbied against the Treasury blueprint since it was released March 31. CUNA charges that the Treasury plan would essentially eliminate credit unions if its long-term recommendations were put into place and is completely counter to the Bush administration’s long-standing support of the credit union movement. In April, the chairman of the House Financial Services Committee and a high-ranking Republican member of that panel each sent credit unions their assurances that the U.S. Congress values the unique role of financial services cooperatives. Chairman Barney Frank (D-Mass.), in a letter to CUNA, wrote that the Congress appreciates the role credit unions play in the country's financial services system. Frank acknowledged CUNA's concerns regarding the devastating affect the Treasury proposal could have on credit unions and said that any proposal to do away with credit unions is a proposal that will go nowhere. Rep. Ron Paul of Texas, who is the ranking member on the House Financial Services subcommittee on domestic and international monetary policy, trade, and technology, wrote similar assurances to the Texas CU League.
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