WASHINGTON (10/29/09)--Commenting on recently introduced draft legislation aimed at controlling systemic risk in the financial system, Credit Union National Association (CUNA) Vice President of Legislative Affairs Ryan Donovan said that CUNA “does not believe credit unions pose a systemic risk to the financial system.” He added that credit unions will likely not be “covered by or affected directly by the legislation. “If even one of the largest credit unions were to fail, as costly as that might be to the credit union system, it would not threaten the overall financial system,” he added. The draft bill, which was released by House Financial Services Committee Chairman Rep. Barney Frank (D-Mass.) earlier this week, would create a monitoring system intended to reduce the threats that systemically risky firms pose to the financial system. The legislation also would establish a process for shutting down large, financially troubled nonbank financial institutions in a way that minimizes impact on U.S. taxpayers and the financial system. The bill also contains general provisions aimed at overhauling the country's financial regulatory system. The Federal Reserve Board would be granted oversight, regulatory, and enforcement powers over systemic firms under the legislation, which would also create an interagency regulatory council to advise legislators on financial regulation, American Banker reported. The National Credit Union Administration would serve on this regulatory board, if established. The Fed also may be granted the power to impose uniform standards for liquidity, risk-based capital, and leverage, American Banker added. CUNA is currently analyzing the legislation.