CUNA, NAFCU Coordinating Body Focuses on Regulatory Relief

August 14, 2001

FOR IMMEDIATE RELEASE
Contact: Mark Wolff, CUNA,
202-218-7745

John Zimmerman, NAFCU,
703-522-4770

WASHINGTON -- CUNA and NAFCU leaders this week reviewed their respective proposals seeking regulatory relief for credit unions and pledged to work cooperatively with NCUA Chairman Dennis Dollar and House Financial Services Committee Chairman Michael Oxley, R-OH, who is spearheading the legislative effort.

Meeting by conference call Aug. 27 under the auspices of the National Credit Union Legislative and Regulatory Coordinating Council, the two associations applauded both Chairman Oxley and NCUA Chairman Dollar for recognizing credit unions' need for regulatory relief and making it a clear priority. They also expressed their appreciation for Dollar’s solicitation of their input and expressed their desire to fully support the final list of recommendations that the NCUA Board ultimately forwards to Chairman Oxley.

"We very much appreciate Chairman Dollar’s firm commitment to regulatory relief, and we are pleased that he has offered us this opportunity to participate in the process," said NAFCU Chair Jim Mills, CEO of Three Rivers FCU in Ft. Wayne, IN. "We look forward to providing Chairman Oxley with specific suggestions to make it easier for America’s credit unions to better serve their members."

"Congress has not enacted a regulatory relief bill in several years. And this is the first time in many years that an effort has been made to reach out to credit unions for suggestions on specific provisions that can be incorporated into the bill," said CUNA Chairman Dave Maus, CEO of Public Service Credit Union, Denver, CO. "With Chairman Oxley leading the effort, it virtually ensures regulatory relief will be a high priority for the committee."

Rep. Oxley is expected to introduce his regulatory relief bill shortly after the Labor Day recess, beginning a legislative process that will continue into next year. Last week CUNA and NAFCU provided a list of suggested relief proposals to NCUA Chairman Dollar. NCUA will consider these proposals as it develops its own list that will be sent to Chairman Oxley later this week.

CUNA’s preliminary recommendations for Chairman Oxley include authorizing credit unions to invest in private debt instruments, authorizing credit unions to invest more than 1% in credit union service organizations (CUSOs), permitting voluntary mergers of healthy credit unions, and giving credit unions the option of issuing uninsured membership shares to count as net worth. CUNA suggested added relief could be attained by amending the FCU usury ceiling, prompt corrective action provisions, member business lending limits and other lending restrictions, such as the 12-year maturity on loans, and making field-of-membership changes consistent with the unique nature of credit unions.

NAFCU’s recommendations include restoring pre-CUMAA authority for healthy credit unions to merge voluntarily, allowing federal credit unions converting to a community charter to continue to serve their previous SEGs after a conversion, eliminating "local" from the definition of community, eliminating the preference under CUMAA for the formation of new credit unions over the addition of groups to an existing credit union, repealing the 12-year limit on loans, and relaxing the current member business loan restrictions imposed by CUMAA.

NAFCU leaders on yesterday’s coordinating council conference call included Mills, NAFCU Vice Chair Diane Furnas, CEO of Southwest Airlines FCU, Dallas, TX, NAFCU Legislative Chairman Mike Vadala, CEO of The Summit FCU, Rochester, NY, NAFCU Director Brad Beal, CEO of Nevada FCU, Las Vegas, NV, NAFCU President and CEO Fred Becker, and senior NAFCU staff.

In addition to Board Chairman Maus, CUNA representatives on the call were CUNA Treasurer Juri Valdov, CEO of Northwest Federal Credit Union, Herndon, VA,

With its network of affiliated state credit union leagues, Credit Union National Association serves more than 90% of America’s 10,700 credit unions, which are owned by more than 80 million consumer members. Credit unions are not-for-profit cooperatives where people are worth more than money. For more information, visit www.cuna.org.

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