WASHINGTON — NCUA General Counsel Michael J. McKenna told the House Financial Services Committee Tuesday that 70% of new rules put in place by the agency since last January have provided regulatory relief to credit unions without incurring additional costs.
McKenna told the committee that of the 17 rules the NCUA board has approved since January 2013, five provided regulatory relief, four addressed safety and soundness concerns, one was required by Dodd-Frank and the remaining several were technical in nature.
The hearing, "Who's In Your Wallet: Examining How Washington Red Tape Impairs Economic Freedom," also featured testimony from Meredith Fuchs, general counsel of the Consumer Financial Protection Bureau; Richard Osterman, acting general counsel of the Federal Deposit Insurance Corp.; Scott Alvarez, general counsel of the Federal Reserve; and Amy Friend, chief counsel of the Office of the Comptroller of the Currency.
McKenna cited NCUA chairman Debbie Matz's Regulatory Modernization initiative, which he said strives to find a balance between safety and soundness responsibilities and the effects of regulation on the bottom lines of credit unions.
"NCUA is working to streamline its regulatory framework," he said. "Through this initiative, the NCUA Board has approved four targeted rules to mitigate risk and six rules to cut regulatory burdens. Rather than adopting one-size-fits-all regulations, NCUA targets rules to risk and asset size and strives to ensure rulemaking is reasonable and cost-effective."
One credit union trade group disagreed.
The NCUA has "seriously [underestimated] the impact of the regulatory burden," NAFCU president and CEO Dan Berger said in a statement released after the hearing. "Much more can be done to provide regulatory relief to credit unions."
"Specifically, we hope that NCUA will heed and be responsive to credit unions' comments regarding the proposed risk-based capital rule," Berger said. "Contrary to NCUA's stated aim, the risk-based capital rule will be one-size-fits-all and create significant burdens because it will force all credit unions to adjust their capital, not just the 3% of credit unions NCUA currently estimates would be downgraded under the proposed rule."
In February, NAFCU released a five-point plan for CU regulatory relief and a call for Congress to enact meaningful legislative reforms. In December 2013, the trade group released what it called its "Dirty Dozen," a list outlining 12 key regulatory provisions impacting credit unions that should be changed or eliminated entirely.
McKenna told the House committee that the NCUA's rolling three-year review process helps keep the regulatory framework up-to-date and reflective of the current environment.
He also detailed ways he said the agency has worked to promote greater transparency, streamline the examination process for smaller CUs, and re-allocated resources to put a greater focus on the biggest potential risks to the Share Insurance Fund.
