WASHINGTON—In separate comment letters filed with NCUA on Monday, NAFCU and CUNA are pressing the agency to improve its rules around bylaws.
The letters were sent as part of the comment period related to NCUA’s annual review of its regulations, one-third of which are scrutinized each year for whether they can be updated, clarified, simplified or just plain eliminated. Among the regs up for review this year are those involving fees paid by FCUs, CU service contracts, capital adequacy rules, and bylaws. The filing deadline was Monday.
CUNA’s Andy Price, senior director of advocacy and counsel, said a focus of its letter is the bylaws, which he said CUNA hopes the agency “brings into the 21st Century. Now they require a standard set for all federally chartered credit unions regardless of their size or assets. So we are asking (NCUA) to allow some flexibility in that regard.”
Other concerns outlined in CUNA’s letter are field of membership, designation of low-income status, prompt corrective action—areas where rules are pending that CUNA has already commented on. “And we are reiterating our concerns, along with recommendations in six or seven other areas,” said Price.
NAFCU Director of Regulatory Affairs Alicia Nealon’s letter urged NCUA to implement further regulatory relief during its 2015 review of its regulations – particularly those relating to fields of membership, credit union bylaws and loan participations. Nealon also highlighted NAFCU’s revised “top ten” list of regulations to eliminate or amend.
“Acknowledging this increasing regulatory burden, NCUA Chairman (Debbie) Matz announced in March 2015 that the agency was ‘committed to making 2015 the year of regulatory relief,’” Nealon wrote. “NAFCU agrees that the agency needs to focus on ways to provide much-needed relief to credit unions, many of whom are struggling to survive in a post-Dodd-Frank environment characterized by overwhelming compliance burdens.”
Nealon also raised concerns about the Financial Accounting Standards Board’s plans to finalize a new standard for the financial reporting of credit losses, which she noted would require credit unions to artificially increase balance sheet allowances and reduce available capital. Nealon also reiterated NAFCU’s concerns about CFPB’s planned payday rulemaking – which could negatively impact credit unions’ affordable payday alternative loans (PALs).
Among Nealon’s suggestions for regulatory updates are:
- Streamline the process of applying for FOM expansions or conversions and remove non-statutory requirements imposing geographic- and population-based limitations on community charters.
- Modernize the federal credit union bylaws to give credit unions more flexibility.
- Hold federal credit unions and federally insured, state-chartered credit unions to the same standards for risk retention under the agency’s loan participation regulations.