WASHINGTON—CUNA said it supports a joint interagency proposed rule to codify a 2018 statement that guidance from agencies such as the NCUA does not have the force and effect of law.
CUNA noted in its comments to the agency on the proposal that is vital that NCUA, “appreciate the significant differences between regulation and guidance.”
“Regulations create binding legal obligations,” the letter reads. “Supervisory guidance is issued by an agency to ‘advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power’ and does not create binding legal obligations.”
CUNA has called on NCUA to refrain from using supervisory guidance as a basis for an adverse finding during an examination.
“We appreciate the role of supervisory guidance and support the proposal to codify the 2018 Statement,” the letter reads. “Doing so not only ensures credit unions know exactly where an examiner is basing its decisions on but also ensures the basis for such decisions is well-founded, given statutes must go through the legislative process and regulations through the rulemaking process under the Administrative Procedure Act. Examiners must clearly identify where a requirement or prohibition is in an established law or regulation.
‘Particularly Helpful’
“With that said, we urge the NCUA to continue examiner engagement in productive discussions with credit union staff regarding supervisory guidance,” continues the letter. “Such discussion is particularly helpful when there is confusion regarding a specific regulation and its application to the issue at hand. Further, codifying the 2018 Statement could also help credit unions avoid unnecessary legal exposure.”