MADISON, Wis. — Re-regulation of the financial services-particularly having just one regulator for all financial institutions-is up for consideration, so Filene Research Institute is delving into what such a change would mean for CUs.
"Evaluating the Single Financial Services Regulator Question" by Filene Chief Research Officer George A. Hofheimer suggests that a variety of political, economic and social trends foreshadow the potential for a single regulator, even though CUs stand against the creation of such an entity. The current economic crisis is viewed, in part, as a failure of regulation, suggesting major changes are necessary. Hofheimer further notes that the worldwide trend in financial services regulation has been toward a more consolidated structure, even though the link between financial regulatory structure and safety, soundness, and/or performance is weak. The result: CUs would be wise to prepare for a single regulator scenario and/or be proactive in fighting for what they want.
On the upside, however, CUs could be in a position to shape the changes to come, Hofheimer suggests in the study. Paradoxically, credit unions may have the opportunity to benefit in a new, more limited regulatory structure. While it would be premature to predict what the exact regulatory structure will look like, the probability of a more consolidated structure is high.
