WASHINGTON—If the Trump Administration were to combine federal financial institution regulators, the credit union difference would be lost, the Defense Credit Union Council contends.
As CUToday.info reported, the Trump transition team is reportedly seeking ways to markedly shrink, consolidate or even eliminate the top financial services industry watchdogs in Washington.
“Consolidating financial regulators into a single, broader regulatory framework is not a good idea,” said DCUC Chief Advocacy Officer Jason Stverak. “We believe such a move would undermine the unique role credit unions have earned in securing and building our nation’s economy. Simply put, it is a solution in search of a problem.”
Stverak emphasized that Congress needs to recognize credit unions are not banks.
“Thus, credit unions require a unique level of oversight,” he said. “Forcing them into a for-profit regulatory model would place large financial institution restrictions on community-based credit unions. Having a strong, independent regulatory allows for community-focused alternatives.”
A one-size-fits-all approach with the FDIC and OCC simply undermines the CU industry’s ability to provide affordable, member-driven services that have always been a part of the movement’s mission, Stverak said.
Don’t repeat Mistakes
“Plus, we have seen this play out before,” Stverak said. “The 2010 dissolution of the Office of Thrift Supervision (OTS) caused many institutions formerly regulated by the OTS to struggle in the aftermath. Many had difficulty in adapting to a new regulatory model which demonstrates how consolidation creates confusion, inefficiencies and increased risks for consumers. We believe absorbing the NCUA into a larger agency would repeat the same mistakes.”
Stverak pointed out there are 140 million Americans and their families who rely on credit unions every day to “support their financial freedom. This fight isn’t about protecting a regulatory agency, it's about protecting the American people. We must stand firm against proposals to dismantle the NCUA and instead prioritize the needs of the communities credit unions serve.”
Credit unions have a job to do, stressed Stverak. He said incoming Trump Administration officials and members of Congress must be educated on the harm the proposed “ill-advised changes” to the regulatory landscape will bring.
“People promise these proposals will bring efficiency but in fact will deliver chaos,” he said. “DCUC urges our nation’s leaders to recognize the critical role the NCUA plays in safeguarding inclusion and stability within the financial ecosystem. The NCUA has proven time and time again that it is a strong and effective regulator for the industry. When America has faced financial challenges, the NCUA's steady and calm leadership has ensured credit unions—and most importantly their members—weathered every storm. The failure to preserve a strong, independent NCUA will upend the stability of credit unions and the communities they serve— especially service members and veterans.”
CUs Cannot Be Silent
Discussions surrounding consolidation become more serious if credit unions are silent on the issue, concluded Stverak.
“That is why DCUC has been raising the issue in our communications with members of Congress and the public for months,” he said. “:Our hope is that because of our proactive approach in conjunction with our members, the Trump administration and Congress sees the incredible value of a strong and independent NCUA and rejects attempts to consolidate regulators.”
Steverak, too, believers the Trump Administration has higher priorities.
“In the end, I expect that after a review of all the facts, the Trump Administration and Congress will come to the same conclusion that we have and support an independent NCUA,” Stverak said. “As we expressed in our letter to President Trump after the election, we look forward to working with him and his team on this or any issue impacting credit unions and the nearly 140 million Americans they serve.”