State Regulators Push SecondaryCapital
WASHINGTON - (06/10/05) -- State and federal credit unionregulators continued to lobby Congress Thursday to help easecapital restraints for credit unions as part of a regulatory reliefbill. NCUA Chairman JoAnn Johnson pressed the case for creation ofa risk-based capital system for credit unions, similar to onerequired of banks and thrifts. But George Latham, Virginia creditunion supervisor who was testify on behalf of NASCUS, said thestate regulators continue their support of a provision allowingcredit unions to offer secondary capital and to count it as networth. Such a proposal has all but been abandoned in favor of arisk-based system by CUNA, NCUA and other groups that had beenstudying, but never fully endorsed secondary capital. Latham alsourged the House Financial Services Subcommittee on FinancialServices, which is drafting a regulatory relief bill, to act tostop NCUA and other federal regulators from preempting stateconsumer protection laws and regulations, like those aimed atcombating predatory lending or expanding disclosure requirements oncredit cards. Latham's suggestion, which was also endorsed by statebanking regulators, comes as NCUA and the banking agencies haveincreasingly ruled to invalidate state laws with regard tofederally (national) chartered credit unions and banks.