Removing Barriers Blog

CUNA Writes to Senate Banking Committee Prior to Hearing with NCUA Chairman
Posted May 15, 2019 by CUNA Advocacy

The Senate Banking held a hearing entitled “Oversight of Financial Regulators." NCUA Chairman Hood was on the witness panel. Prior to the hearing, CUNA wrote to Chairman Crapo and Ranking Member Brown with steps the NCUA should take toward enhancements to the credit union charter, while improving cybersecurity efforts and reducing regulatory burden.

The hearing brought together leading officials from the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board of Governors (“Fed”), Federal Deposit Insurance Corporation (FDIC), and the NCUA. Collectively, the primary topics of discussion included conversation on the state of the financial regulatory system, the Community Reinvestment Act, and updates on ongoing and past regulatory actions.

The Chairman opened the hearing by discussing the Fed’s most recent supervisory and regulatory report outlining how the economy’s performance has contributed to a robust bank lending system. Consequently, the passage of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act last year helped bolster this growth, with regulators now charged with taking steps to implement the law and alleviate regulatory constraints for financial institutions.

In addition to writing to the Committee's leadership, CUNA’s Chief Advocacy Officer Ryan Donovan also reached out to Committee Members and their staff in response to several concerns about NCUA raised by banking organizations.



You may have received an email recently from the bank lobbyists suggesting a line of questioning for NCUA Chairman Rodney Hood related to the recent conservatorship of a $20 million credit union in California at this week's hearing in the House Financial Services Committee.   
We take the conservatorship of a credit union very seriously, and we appreciate the steps NCUA has taken to insulate the National Credit Union Share Insurance Fund (NCUSIF) from further losses related to this small credit union.  Indeed, the failure of any financial institution is a serious matter, as the bankers and their members know well.   
We appreciate and encourage the important role the committee plays in the oversight of the operation of the NCUSIF and the Bank Insurance Fund.  If your boss is interested in a line of questioning for the regulators related to the safety and soundness of insured depository institutions, please consider exploring the following facts:

  • FDIC has operated in the red twice in the past 30 years, for a total of four years.  During these times, the health of the entire U.S. financial system was imperiled.  In contrast, the NCUSIF never fell below $1.20 per $100 in insured shares.
  • Between 2008 – 2018, the assets of failed credit unions totaled $12.4 billion compared to $701.3 billion for banks that failed during that time.  
  •  Since 2009, banks have been subject to more than $260 billion in fines and settlements. They haven't just put considerable and repeated pressure on their insurance fund, but they've also taken advantage of consumers and investors.

No regulator is perfect and Congress has an important oversight function to perform.  But it's more than a little disingenuous for the bank lobbyists to suggest the failure of a small credit union means there are systemic issues at NCUA while the insurance fund their members are a part of has had so many problems and operated in such great turmoil over the last 30 years. 
Thank you for your consideration. 
Ryan Donovan