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FOR IMMEDIATE RELEASE
September 14, 2023
The Credit Union National Association (CUNA) and World Council of Credit Unions (WOCCU) sent a letter Thursday addressing the implementation of a Basel III proportionality framework to establish a simpler and more reasonable approach for credit unions to leaders of the U.S. House of Representatives’ Financial Services Committee.
“We support the Federal Reserve’s consideration of adopting the final pieces of the Basel III framework for banks under their purview. However, it is important to understand the proportionality built into the framework that must allow for tailoring for credit unions. Any such amendments must allow for this approach to allow for diversification in the marketplace and to allow community-based financial institutions to continue to serve their communities,” the letter reads.
CUNA and WOCCU sent the letter to coincide with Thursday’s Committee hearing entitled: Implementing Basel III: What’s the Fed’s Endgame?
“The Basel Committee itself has noted simpler approaches and adapted regulations could be suitable for smaller, non-internationally active financial institutions, and NCUA has taken that approach even further for U.S. credit unions, tailoring certain requirement for size, risk and complexity,” said CUNA Deputy Chief Advocacy Officer for Federal Government Affairs Jason Stverak. “We believe the proportional approach ensures applicable rules and regulations are consistent with credit unions’ relative systemic importance.”
“Basel III was intended for large, internationally active banks. Without proper proportionality contemplated in the framework, the disproportionate regulatory burdens associated with Basel III will continue to exacerbate the ’Too-Big-To-Fail’ problem by increasing the market power of the largest deposit-taking institutions, while increasing consolidation among community-based deposit taking institutions,” said Andrew Price, WOCCU Senior Vice President of International Advocacy and General Counsel.
CUNA and WOCCU urged G20 leaders last March to provide direction to international standard setting bodies to work with national-level regulators on proportionality for the purposes of advancing financial inclusion.
Credit Union National Association (CUNA) advocates on behalf of America’s credit unions, which are owned by more than 135 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.