In a letter to the National Credit Union Administration (NCUA), National Association of Federal Credit Unions (NAFCU) Director of Regulatory Affairs Alicia Nealon encouraged the NCUA to use its 2015 Regulatory Review as an opportunity to provide credit unions with regulatory relief.
About one-third of the NCUA regulations were addressed in the regulatory review, including regulations field of membership, credit union bylaws, and loan participations, according to the NAFCU. Nealon also attached her organization's "wish list" for regulatory relief, which contained the "Top 10" regulations NAFCU wishes to eliminate. The list included Improve the process for credit unions seeking changes to their field of membership and providing more meaningful exemptions for small institutions.
"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."
In the letter, Nealon expressed concerns about the plans of the Financial Accounting Standards Board to finalize a new standard for the financial reporting of credit losses. The new standard would require credit unions to artificially increase their balance sheet allowances and reduce capital available to them, according to NAFCU. Nealon also related the suggestions made by NAFCU as to executive compensation, designation of low income status, fixed assets, capital adequacy, investment and deposit actitivies, and credit union mergers.
Nealon suggested the following regulatory updates in her letter:
- Streamlining the process of applying for Field of Membership expansions or conversions, and removing the non-statutory requirements that impose limitations on community charters based on geography and population
- Giving credit unions more flexibility to modernizing the federal credit union bylaws
- Increasing the clarity in loan participation regulations, in order to encourage more credit unions to utilize loan participations
Nealon also shared NAFCU’s suggestions relating to executive compensation, designation of low-income status, fixed-assets, capital adequacy, investment and deposit activities, and credit union mergers.