MILWAUKEE - State legislatures have warned Congress and the National Credit Union Administration not to trample on state-chartered institutions.
The National Conference of State Legislatures approved on July 20 a policy that takes a strong line against preemption of state credit union laws.
The policy, introduced at the group's annual convention, was crafted by the Credit Union National Association over the past two years. The National Association of State Credit Union Supervisors also supported it.
The conference of legislatures "will oppose any effort by the Administration and Congress to preempt state credit union laws and regulations which do not adversely impact the financial well-being of state-chartered credit unions and thus the National Credit Union Share Insurance Fund," the policy said.
The fund, which covers most state-chartered credit unions, is administered by the National Credit Union Administration, the regulator of federally chartered credit unions.
There has always been tension between states and the NCUA over how far the federal government's power should extend.
This tension between states has grown more pronounced lately. NCUA regulations affecting corporate credit union governance and investments will extend to all liquidity centers, regardless of their charter.
Further, the agency supports a bill introduced by Sen. Alfonse D'Amato, R-N.Y., that will strengthen the NCUA's grip over state charters.
During a July 25 speech in Washington before Women in Housing and Finance, NCUA Chairman Norman E. D'Amours expressed frustration with needling from state regulators.
