By Michael Fryzel
A few months ago, I penned an article that joked about a consolidation of all financial regulatory agencies into the United States Treasury Department. I speculated that an effort would be made to create a new super division within Treasury that would oversee the entire financial services industry.
I concluded by admitting it was fake news, even though some Washington insiders would, if held to the cloak of anonymity, confess that it has been discussed.
Fast forward to today, just four months later, and it is a subject that is now and will continue to be talked about.
One only needs to look at the steady decline in the number of credit unions to know why the industry would be part of any consolidation. In the last 10 years, the number of credit unions has decreased by almost 2,500. There were more than 8,000 in 2007 and fewer than 5,700 today. By 2020 the total number could be under 5,000.
While the industry continues to grow and prosper with record number of members and assets, the reduced number of institutions gives the consolidation advocates a good reason to pursue their agenda. Credit unions will continue to become larger in size and complexity as mergers continue, but that alone may be difficult to use as an argument by them to continue to have their own regulator.
Banks and thrifts are complicated as can be payday lenders. Some would suggest that having the oversight of one agency for all types of financial institutions would provide fairer and more standardized regulation along with the level playing field for which everyone has advocated.
One should not be surprised if they continue to hear the consolidation word used in the discussion of financial regulators. If the House and Senate of the Congress can start working together and agree on a reform agenda, anything is possible.
Then, in this case, the fake news of months ago may become the real news of tomorrow.
Michael Fryzel is a former chairman and board member of NCUA. He can be reached at meflaw@aol.com.