Removing Barriers Blog

NCUA Chairman Matz to Testify Before House Committee
Posted July 19, 2015 by CUNA Advocacy

It’s been six years since the last time NCUA held a hearing on its budget; it’s been almost four years since an NCUA Chairman has testified before the House Financial Services Committee.  On Friday, that will change when NCUA Chairman Matz testifies before the House Financial Services Committee.  And, while the hearing is not the venue we had been seeking for stakeholders to weigh in on the agency’s budget, it would be reasonable to expect that the budget will be among the several topics Members hone in on.  Without a doubt, the spotlight will be on NCUA and credit unions Friday morning.

In advance of the hearing, we met with Committee staff and Members over the last several weeks to raise concerns and opportunities we see at NCUA.  Much of our conversations have focused on recent rulemakings and proposals, including the RBC2 proposal and our concerns with respect to NCUA’s legal authority to issue the rule and the capital adequacy provision that was added to the revised proposal.  We have discussed our recent comment letter on the proposed rule on Interest on Lawyer Trust Accounts (IOLTAs) and our belief that even without the enactment of the IOLTA legislation last year, NCUA has the authority to extend share insurance coverage to prepaid debit accounts. 

We have also raised concerns that the RBC2 proposal and the agency’s view of “systemically significant” seems to suggest the agency is simply copying bank regulation without much regard for the characteristics that make credit unions different.  No credit union represents a system risk to the financial system, but the agency is applying standards to the largest credit unions that rival requirements on the huge, systemically significant banks.  

During these meetings, a host of other issues have been raised by Members including NCUA’s handling of the corporate stabilization fund, examination issues, and the overhead transfer rate.

Finally, we also have taken the opportunity to discuss what we viewed was working well at the agency, including our initial favorable view of the member business lending proposal and the initiative the agency is taking on field of membership.  We intend to submit a letter to the Committee in advance of the hearing highlighting these and other issues. 

It will be a Friday morning hearing, so there is no telling how well attended it will be. Nevertheless, it is important that these and other issues are raised for the record, and we appreciate Chairmen Hensarling and Neugebauer for holding this hearing.