WASHINGTON (3/11/15)--National Credit Union Administration board member J. Mark McWatters called for the agency to create three formal advisory committees, during his remarks at CUNA's Governmental Affairs Conference Tuesday.
The committees would advise the board about the agency's budgetary process, examination and appeals processes, and areas where the NCUA may expedite regulatory relief.
|NCUA board member J. Mark McWatters shares his views on regulatory relief and areas the NCUA should focus on. (CUNA Photo)|
"Regarding the latter point, and as I have previously noted, these areas of regulatory relief should include, at a minimum, supplemental capital for risk-based capital purposes, and a complete rewrite of the member business lending and field-of-membership regulations," McWatters said. "The advisory committees should report their finding to the NCUA board on a regular basis, and the board and NCUA staff should transparently and thoroughly vet the recommendations offered by the advisory committees."
McWatters added that the NCUA should not regulate credit unions as though they are too big to fail, or that they present a systemic risk to the American economy.
CUNA President/CEO Jim Nussle praised the push from McWatters regarding regulatory relief.
"I applaud NCUA board member McWatters for urging prudent regulatory relief by the agency," he said, adding that CUNA agrees that the regulator should not treat credit unions as if they are too big to fail. "We look forward to working with the board toward meaningful regulatory relief to ensure credit unions are able to offer the best service to their members."
McWatters said true regulatory relief "emanates from a thoughtfully targeted reconsideration of NCUA's regulatory philosophy directed so as to assist a broad swath of credit unions in better serving their members and enhancing the cooperative financial services model, while maintaining the safety and soundness of the share insurance fund."
This includes turning agency focus away from creating what McWatters called "onerous" new rules, and instead looking at fraud, which, according to NCUA statistics, caused approximately 58% of National Credit Union Share Insurance Fund losses over the past five years.
"NCUA must take a more thoughtful and diligent approach to combating fraud and inadequate internal control systems at credit unions," he said.
McWatters said the NCUA must not us "the chorus of 'safety and soundness' as a catch-all justification for every rule and regulation," cautioning that "its overuse, like anything, renders it pedestrian and ineffective."