While the NCUA’s new risk-based capital rule dominates discussion about credit union regulations, the agency last week reminded the regulated that there’s more on the docket than just RBC2.
Every year, the agency reviews a third of its regulations, a rolling process it says is part of its overall effort to “streamline, modernize, or where appropriate, eliminate regulations.” This year’s list is now online, along with instructions on how to get comments in by the Aug. 3 deadline.
League and trade group executives, consultants, and attorneys pointed to several areas they deem particularly ripe for review, including field of membership, lending, and bylaw rules. But they also noted that there’s a big deadline before that: April 27 for comments on the revised RBC rule.
Suzanne Yashewski, senior vice president and regulatory compliance counsel for the Cornerstone Credit Union League, says her members — credit unions in Texas, Arkansas and Oklahoma — submitted 200 comment letters after the first RBC rule was proposed.
“We’re certainly hoping they’ll come through again,” Yashewski says. Meanwhile, she says, Cornerstone will comment on the regulatory review list ahead of that August deadline. “This is a perfect opportunity to push for changes you’d like to see,” the league attorney says.
Rick Wargo, executive vice president and general counsel at the Pennsylvania Credit Union Association, says his league also will comment on the annual review cycle. It can have an impact, he says, pointing to last year when the NCUA agreed to amend the rules on fixed asset waivers. However, while the agency agreed to the change, a new rule has not been finalized.
“But comments definitely have an impact,” says Wargo’s colleague, PCUA communications SVP Mike Wishnow. “The most obvious example is with RBC1, where there was a fantastic advocacy effort nationwide, and it ended in better results in the final rules.”
That said, FOM and bylaws regulations are areas in the annual regulatory review that may hold the most promise for change, observers say. Working groups already have been established around these issues, says credit union attorney Steve Van Beek in Detroit.
“For both these, the NCUA has already agreed that changes need to be made — which means the first hurdle has been cleared and credit union comments are more likely to have an impact,” Van Beek says.
At NAFCU, SVP and general counsel Carrie Hunt says, “We look forward to commenting in particular on field of membership rules. There are also areas in the lending realm that can be improved upon.”
At Iowa-based consultancy PolicyWorks, CEO Justin Hupfer says progressive FOM regulations within the bounds of the Federal Credit Union Act are important. He says credit unions should take the opportunity to advise the NCUA of changes in that area that would allow them to better serve consumers in their community.
Hupfer adds that “we want to make the federal charter as competitive as the state charter, so our federal credit unions can also have the best possible outreach to consumers.”
He says regulators really do listen, and it’s particularly helpful to provide specific examples on how different common bonds could be used to modify FOM regulations within the confines of the Federal Credit Union Act.
Meanwhile, Patrick La Pine, president/CEO of LSCU & Affiliates in Tallahassee, FL, points to FOM and to secondary capital working groups. He says he and his staff met with NCUA Chairman Debbie Matz on those issues in January.
La Pine, whose league represents Florida and Alabama credit unions, adds, “As a whole, we always encourage our members to look at the list closely and send comment letters to the agency. The NCUA won’t know how you feel if you don’t let them know.”
But don’t necessarily get your hopes up. Van Beek concludes, “Unfortunately, NCUA’s annual regulatory review does not often result in positive regulatory change for credit unions, because NCUA needs to agree that the regulation needs to be changed.”