NCUA Has Taken Positive Steps for CUs Under Chairman Hood, CUNA Writes Senate Committee

CUNA identified both where it has seen positive steps by NCUA as well as issues where improvements can be made in a letter for the record of NCUA Chairman Rodney Hood’s testimony before the Senate Banking Committee Thursday.

Hood  testified Wednesday before House Financial Services Committee, and was joined at both hearings by Federal Reserve Vice Chairman of Supervision Randal Quarles and FDIC Chair Jelena McWilliams as part of federal regulators’ semi-annual testimony before Congress.

Recent actions that have been positive for credit unions include NCUA’s:

  • Recognition of the importance of data and cyber security, and its commitment to make it an area of focus. CUNA supports Hood’s recent efforts to bolster the agency’s involvement in cybersecurity;
  • Commitment to addressing unnecessary regulatory burden, including the agency’s decision to respect the spirit and intent of President Donald Trump’s executive order to reduce regulatory burden and the work of the agency’s Regulatory Reform Task Force;
  • Continuing to provide comprehensive budget information and rationalization of budget and agency expenditures in the contact of a well-communicated strategic plan;
  • Recent efforts to extend the examination cycle for certain credit unions;
  • Efforts to streamline examinations and make operations more efficient; and
  • Work to modernize the call report.

Areas in which NCUA can improve include:

  • The risk-based capital rulemaking, which CUNA continues to believe is a solution in search of a problem;
  • Employing a more pro-active and collaborative strategy with industry stakeholders to better ensure credit unions are prepared for the current expected credit loss (CECL) standard;
  • Creating and providing a concrete, public plan to achieve regulatory relief;
  • Extending the credit union asset threshold for the 18-month examination cycle to $3 billion (from the current $1 billion);
  • Phasing down the National Credit Union Share Insurance Fund Normal Operating Level to 1.30% by 2021. CUNA also encourages NCUA to issue additional share insurance fund distributions whenever possible, with the expectation that the initial increase in the NOL was temporary.

CUNA’s letter also emphasizes that NCUA should continue coordination with other federal regulators, including but not limited to the Consumer Financial Protection Bureau and the Federal Communications Commission.