Removing Barriers Blog

Credit Union Concerns Sent to Committees Prior to NCUA Chairman Hood's Testimony
Posted May 15, 2019 by CUNA Advocacy

CUNA wrote to the Senate Banking Committee, House Financial Services Committee, and to Committee members and their staff prior to NCUA Chairman Rodney Hood’s testimony before both Committees this week.  Chairman Hood will appear before the Committees as part of a panel of federal financial regulators.

In the letters, CUNA wrote that the NCUA should take steps toward enhancements to the credit union charter, while improving cybersecurity efforts and reducing regulatory burden.

The credit union industry has focused its advocacy efforts on enhancements to the credit union charter. Therefore, we urge the agency to take steps toward this objective, which may include collaborating with parties outside NCUA.  Concern over cyber and data security is likely the single biggest issue currently facing most industries, including financial services.

“We ask the agency to outline its short- and long-term strategy for ensuring credit unions and the agency are well positioned to avoid unauthorized loss of information through both cyber and general data breach threats… we ask the agency to provide a roadmap of both the concrete and policy approaches it will commit to in order to reduce the ever-increasing regulatory pressures on our nation’s credit unions,” Nussle adds.

CUNA continues to strongly support NCUA’s current status as an independent regulator and insurer but urges NCUA to coordinate with other regulators as needed, including with the Consumer Financial Protection Bureau (CFPB) on consumer protection regulations and the Federal Communications Commission on modernization of the Telephone Consumer Protection Act.

CUNA also highlighted recent positive actions by NCUA and expressed hope that the agency builds on the positive momentum on things like extended exam cycles, streamlined and virtual examinations, modernization of the call report, field-of-membership litigation and others.

Advocating on Behalf of NCUA

In addition to the letters sent to Committee 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.

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Hello,

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