WASHINGTON — Two credit union trade associations last week called for "significant changes" to NCUA's proposed rules on corporate credit unions.
Without those changes, said CUNA, it will not be able to support the plan. Specifically, CUNA, along with NASCUS, said it cannot support NCUA's proposal limiting credit unions to membership in one corporate credit union. In addition, the groups want changes to portions in the proposal related to internal control and reporting requirements.
"We believe the better public policy would be to allow natural person credit unions to decide which corporates they want to join and to be able to support them without these membership limitations," wrote CUNA in its comment letter. "This approach would benefit natural person credit unions as well as corporate credit unions and would not jeopardize the safety and soundness of either group of credit unions or the National Credit Union Share Insurance Fund."
CUNA went on to say it also has serious concerns over NCUA's plan to ask for "voluntary" contributions from non-federally insured credit unions to the its corporate CUNA stabilization fund.
The trade group argued the agency has no authority to assess non-FICUs and would not be able to defend that position legally. Stated that the statutory record "could not be clearer" that only federally insured credit unions may be assessed for corporate stabilization costs.
CUNA also provided significant comment on those portions of the proposal related to "technical corrections," saying that much of what is included already appears elsewhere in NCUA regulations.
Meanwhile, in its comment letter to NCUA on its proposed corporate rule, NASCUS urged the agency to consider enhancing application of existing corporate regulations and supervisory oversight to address its concerns and to be mindful of encroaching on state law in some areas of the proposal.
NASCUS said in a released statement that it has a difference of opinion as to how best to mitigate risk and address regulatory concerns. Like CUNA, the trade group representing state credit union regulators also noted that the proposal would encourage concentration risk by limiting investment in one corporate, which is "contrary to NCUA's and state regulators' recent emphasis on sound third party due diligence and diversification."
