Written by Michael Coleman, Regulatory Compliance Counsel
There is no denying the fact that regulatory burden is a major issue faced by the credit union industry. Even so, I still sometimes feel like the boy who cried wolf when I am constantly talking about regulatory burden and compliance issues faced by credit unions. But then I remind myself that there actually are wolves out there, and they have really big teeth. As I mentioned in this blog post a while back, I tend to speak in quaint colloquialisms from time to time, and I have been known to make up a word or two as well. If you have ever spoken with me in person or on the phone, you might have heard me refer to the current regulatory environment as "The Reg-pocalypse."
With this in mind, NAFCU is constantly advocating on behalf of our members to try and reduce regulatory burden and provide regulatory relief for credit unions. For example, NAFCU's Five-Point Plan for Regulatory Relief calls on Congress to provide comprehensive broad-based regulatory relief for credit unions. However, in addition to legislative measures, there are other steps which can be taken to help provide regulatory relief to the credit union industry.
As we mentioned in this blog post, the Financial Stability Oversight Council (FSOC) recently issued their 2013 Annual Report detailing the activities of the Council, significant market and regulatory developments, and potential emerging threats to the financial stability of the United States. However, notably absent is any discussion of regulatory burden on financial institutions. This is incredibly unfortunate as the FSOC has a statutory mandate from Dodd-Frank to facilitate coordination between federal regulators.
On May 20th, Fred Becker, NAFCU's President and CEO, sent a letter on the FSOC and regulatory coodination to Sen. Tim Johnson, Chairman of the Senate Committee on Banking, Housing and Urban Affairs, and Sen. Michael Crapo, ranking member of the Senate Committee on Banking, expounding the need for the FSOC to take seriously its duty to facilitate regulatory coordination, here is an excerpt:
"As the tide of regulation rises, there has never been a more critical time for the FSOC, led by Secretary Lew, to facilitate regulatory coordination among its member regulators. This duty includes facilitating information sharing and coordination among the member agencies of domestic financial services policy development, rulemaking, examinations, reporting requirements and enforcement actions. As outlined in the attached letter to then Treasury Secretary Timothy Geithner in June of 2012, under the Dodd-Frank Act the FSOC is effectively charged with ameliorating weaknesses within the regulatory structure therein providing a safe and more stable system as a whole. NAFCU appreciates the committee’s focus on the activities of the FSOC and looks forwarding to learning more about the steps that have been taken to avoid duplicative and over burdensome regulation of our nation’s credit unions."
A similar letter was also sent on May 21st to Rep. Jeb Hensarling, the Chairman of the House Financial Services Committee, and Rep. Maxine Waters, the ranking member of the House Financial Services Committee. Here's hoping we see some relief!