WASHINGTON -
A Matter Of Choice
Mary Dunn, the senior vice president and deputy general counsel of regulatory advocacy in CUNA's Washington, D.C., offices, told the Credit Union Journal chartering choice for credit unions is important.
"CUNA has not supported any private insurer, but we do support the ability to choose between federal and private insurers. There is a real difference between state systems and federal systems. A federal credit union must have federal insurance, but a state credit union can have private insurance as long as its state allows it to make that choice."
According to Dunn, CUNA has been impressed by the "rigor" in which the Washington DFI, particularly the Department of Credit Unions, has gone through to determine if it should allow private insurance. "It has had several rounds of comments, has sat down with stakeholders and has had a very robust process," she said.
Mica's letter addressed to Linda Jekel, director of Credit Unions for the Washington State DFI, noted CUNA rarely files comments with a state regulator on a developing regulatory issue.
Mica further noted banking groups "routinely oppose any and all new policies that provide credit unions with additional flexibility or latitude to meet the financial needs of their members."
Independence Of State Regulators Key
"However, we are dismayed that some within the credit union system have failed to recognize what is really at stake in this rulemaking process-the viability of the dual chartering system and the ability of state regulators to effect independent, tailored decisions developed under a rigorous comment and review process."
Mica went on to write CUNA is a strong proponent of the dual chartering system, which "includes the ability to select or move to private insurance, as long as the credit union's members are fully informed of the implications of the change."
Mica's letter referred to "masked arguments" against the proposal that he asserted "focus on speculative, future risks that might materialize in the event of problems with private insurance. They ignore the fact that the state statute places several restrictions on the implementation of private insurance, including a requirement for adequate reserves that are proportionately equal to the federal system. The statute also requires ongoing review of the private insurance system by the regulator."
He concludes: "In view of the limitations in the state law, we question whether such open charges are really masking an underlying distrust of state regulation, further undermining the dual chartering system."
