LAKE BUENA VISTA, Fla.–Credit unions and CUSOs gathered here were offered some insights on the types of legal changes that could take place at the state level and affect their businesses.
Speaking to the NACUSO Network Conference, Brian Knight, president and CEO of the National Association of State Credit Union Supervisors (NASCUS), said that in looking across the 45 states and one territory where there are state credit union systems one will find a similar number of different rues and regulations.
‘Bits & Pieces’
“I'm not sure I would point to one and say it is the ideal and it is the model, but I think there are bits and pieces from the different states that are intriguing,” said Knight. “In looking at this we ensure other state regulators understand the opportunities that are out there. The state charter in a laboratory of innovation; there are lots of the products and services that we are taking for granted today that started in the state system, whether it was the first credit union to offer share draft accounts or credit cards. All of those things started in a single state when they weren't permissible at the federal level.”
Knight said some states have more flexible CUSO rules than others and he said NASCUS works to bring together the “bits and pieces” that might benefit others.
He said the organization is working on a document in partnership with Brian Lauer, of the firm Messick Lauer & Smith, the long-time counsel to NACUSO, that is designed in part to pull together ideas and suggestions on CUSO regulation. Knight said one objective is to broaden the ability of CUSOs to serve credit unions.
Driving Innovation
In terms of the balance between innovation and the need by regulators to balance risk, Knight said the key lies in “dialogue.”
“I would encourage everyone in credit unions and CUSOs to be talking to your regulators,” said Knight. “They should understand who you are, that you are operating in their state, and what is the solution you're providing. I think you have to appreciate from the regulatory perspective they do have a different mission and have to ensure a viable environment.
“When you talk about innovation, for the regulatory agencies they have two challenges: they have looking at innovation through their safety and soundness, regulatory/supervisory lens, but then they’re are also consumers of innovation and they're thinking about well how do we adopt these technologies to improve our function. It all goes back to dialogue.”