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February 24, 2020
Calabria, McWatters Address Regulation Priorities to Credit Unions at Governmental Affairs Conference
Over 5,500 attendees gathered at the Credit Union National Association Governmental Affairs Conference (CUNA GAC) today for remarks from regulatory leaders from the Federal Housing Finance Agency (FHFA), Director Mark Calabria, and the National Credit Union Administration (NCUA), Board Member J Mark McWatters.
The FHFA is committed to ensuring Fannie and Freddie do not discriminate against lenders based on their size or volume of lending. Calabria noted that the FHFA is reviewing high risk lending factors to further promote home ownership that is sound and beneficial to the home buyer.
“The backbone to the mortgage finance system has always been the community lender,” Calabria said. His priorities include facilitating a preparedness strategy for Fannie and Freddie to solidify clear rules in the event of a stressed environment, reducing compliance costs and making the mortgage industry more competitive.
Calabria encouraged credit unions to reach out to FHFA with recommendations on policy changes and ways to streamline regulations.
Board Member McWatters addressed the process for NCUA’s recent sale of its taxi medallion loan portfolio, stating that the agency determined it was not appropriate to postpone the sale as it would have caused a loss to the Share Insurance Fund.
“The NCUA was charged, under the Federal Credit Union Act, with developing a plan that would yield the least long-term cost to the Share Insurance Fund,” McWatters said. “We made it very clear to those interested in acquiring the portfolio that the winning bidder must work with the taxi medallion loan borrowers in a transparent, good-faith manner and in full compliance with all applicable consumer protection laws.”
McWatters addressed misconceptions regarding the nature and the result of credit union and community bank mergers and acquisitions. He stated that market forces have driven the recent sales of bank assets to credit unions and that the financial institutions could “benefit from a ‘come now, and let us reason together’ approach.”
“We should remain mindful that it is not intellectually possible to discuss the credit union tax exemption in a fair-minded and objective manner without acknowledging the additional statutory restrictions placed on credit unions and the absence of such restrictions on community banks, notwithstanding their ability to avoid corporate-level taxation by making a taxpayer-subsidized Subchapter S election,” McWatters added.
Banking groups have connected the recent uptick in credit union acquisitions to the credit union’s statutory federal tax exemption.
A copy of Board Member McWatters’ prepared remarks is available online. Photos from today can be found here.
*Read more conference coverage from CUNA News, and get live updates on Twitter via @CUNANews, @cumagazine, @CUNA, and by using the #CUNAGAC hashtag. You can also follow the conference on Facebook and Instagram. For a complete schedule and information on keynote speakers and breakout sessions, visit the CUNA GAC event page.
Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 115 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit cuna.org. To find your nearest credit union, visit YourMoneyFurther.com.