America’s National Credit Union Administration is inviting credit union stakeholders to comment on a package of regulatory reforms proposed by an internal agency task force.
The comprehensive review comes in response to the Trump administration’s executive order directing federal agencies to establish a regulatory reform taskforce to look at what can be done to simplify regulations and reduce red tape. Each taskforce has to make recommendations on which regulations can be simplified or repealed.
While the executive order does not apply to NCUA, which is an independent agency, the organisation chose to comply. In January President Trump signed another executive order requiring government agencies to cut two existing regulations for every new rule introduced.
The NCUA is responsible for providing regulation and supervising credit unions while protecting consumer rights and members’ deposits.
Some of the proposals suggested by the taskforce include examining regulations for credit unions service organisations and evaluating permissible activities, removing the 50% borrowing limit for federally-insured, state-chartered credit unions and allowing credit unions with high net worth to be exempt from risk-based capital rules.
The taskforce recommends changes that would be adopted in over the next four years to “clarify, improve, revise, or eliminate regulations”. The proposal will be posted in the Federal Register for a 90-day comment period.
NCUA board chair J. Mark McWatters said: “The need for a forward-looking regulatory structure that offers meaningful relief without undermining safety and soundness is quite clear and these recommendations serve as a roadmap for a thoughtful process to achieve that goal.
“This undertaking represents a more significant and comprehensive regulatory relief effort than the agency has pursued in the past. We initiated this effort in the spirit of the administration’s executive order requiring regulatory review, even though the NCUA is not covered by the order.”
Board member Rick Metsger said: “We have made significant progress in the area of regulatory relief in the years following the financial crisis, and this proposal takes that effort to another level.
“A great deal of work went into developing these recommendations. The task force scoured all the agency’s regulations, looking for ways to make improvements. I hope credit union stakeholders will take time to review this plan carefully and offer comments.”
All regulatory changes would require vote approval by NCUA’s board. The agency has been conducting three-year rolling reviews of all its rules since 1987.
