NCUA's Harper: Large credit unions need more oversight

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Larger credit unions may face different compliance measures if National Credit Union Administration’s Todd Harper has his way.

Harper, an NCUA board member, is requesting public comment on his proposal to "create a dedicated consumer compliance exam program for large, complex credit unions."

“For more than three decades, the NCUA has focused its examination program primarily on safety and soundness reviews,” Harper said in a press release.

Harper continued that the policy “worked well” when the NCUA oversaw an array of smaller credit unions, but since today’s credit unions are “larger and more complex,” he sees room for improvement. Today there are 317 credit unions that exceed $1 billion in assets, he said in the press release.

He hopes to hire three full-time employees in 2020 to develop the examination program within the NCUA’s Office of Consumer Financial Protection.

The NCUA’s current examination process of consumer financial protection laws for credit unions with $10 billion in assets or less differs from other financial regulators. Other regulators conduct regular reviews and assign consumer compliance ratings separate from the Camels rating system.

Harper also noted that the NCUA’s approach “runs counter” to the Federal Financial Institutions Examination Council, a body that works to create uniform standards and processes for financial institution regulators.

Comments on the proposal are due by Dec. 2.

“As the largest credit unions continue to grow in size, the time has come for the NCUA to evolve its consumer compliance program,” Harper said.

Harper has been at odds at times with other NCUA board members since he joined the board earlier this year. During last week’s board meeting, he criticized the regulator for not devoting as much time to consumer and housing oversight as other federal banking regulators.

During the board’s June meeting, he opposed further NCUA delays in implementing its risk-based capital rule. He has also pushed for greater consistency across financial regulators.

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