WASHINGTON–In response to NCUA’s proposal on executive compensation and incentive plans, both credit union trade groups are calling it another layer of unnecessary red tape.
The proposal, required by section 956 of the Dodd-Frank Act, is part of the fallout from the financial crisis, in which some huge incentive packages at banks and Wall Street firms were blamed in part for contributing to that crisis. The proposal has been in the works for five years and currently affects 259 credit unions over $1 billion in assets. For the complete story, go here.
NAFCU called the “onerous and unnecessary.
The rule “adds a layer of reporting that is both burdensome to credit unions and unnecessary for effective regulatory oversight,” said NAFCU President Dan Berger. “NAFCU and our members support transparency, but have had concerns about the incentive-based executive compensation rule since it was first proposed in 2011.”
CUNA President and CEO Jim Nussle, meanwhile, said the trade association is concerned the rule will just layer on more regulatory burden.
"We heard loud and clear from our members – credit unions are concerned the NCUA incentive-based compensation rule gives the agency too much supervisory authority over how credit unions remunerate their employees. CUNA will continue working closely with NCUA to change the proposed thresholds and to minimize the extent to which the agency will review and supervise incentive compensation programs at credit unions. Furthermore, the agency should study in detail the relationship between incentive-based compensation and credit union performance," Nussle stated. "This is another one-size-fits-all rule from regulators. While the intent is to rein in the bad actors who brought upon the economic crisis, credit unions are yet again being saddled with regulatory burden.”