Representatives of the National Association of State Credit Union Supervisors (NASCUS) told NCUA that state-chartered CUs continue to support separating the deposit insurance fund from the agency.
NASCUS Chairman Roger Little, Deputy Commissioner of CUs for the Michigan Office of Financial and Insurance Services, told the NCUA board during budget hearings last week that it should "initiate a study of the agency's organizational structure that would accomplish the goal of appropriately separating the often contradictory functions the NCUA is called upon to perform under Titles I and II of the Federal Credit Union Act."
"I suspect there may be those within NCUA who are tired of hearing about the necessity of making a clear line of distinction between the federal credit union regulatory function and administration of the share insurance fund. We've been told it is a moot point to some," said Little. "However, it remains a significant concern to state regulators and state-chartered credit unions. It's not a dead issue to us."
Little said he wanted to stress NASCUS' firm belief that the current organizational structure and accounting processes within NCUA "preclude an accurate and objective determination of the true cost of providing such insurance to members of federally insured state-chartered credit unions."
The issue, he said, is that state-chartered, federally insured credit unions are paying the "true cost of a regulatory program through the fees assessed by the state agencies. They also subsidize the cost of federal credit union regulation through the allocation of NCUA regulatory costs to the (National Credit Union Share Insurance Fund. That is not right, it is not fair."
For a copy of the testimony: www.nascus.org.
