League backs rounds 10 & 11 of NCUA Deregulation Project

NEWS:  On behalf of Wisconsin’s credit unions, The League has recently commented on the two latest rounds (#10 and #11) of the NCUA’s Deregulation Project. This marks the end of Phase One of the project. Phase Two will begin sometime soon, with the NCUA tackling bigger and more complicated regulatory issues.

Round 10

On June 22, we submitted a comment letter offering support for the NCUA’s Round 10 proposal, which would amend the rules governing the mergers of insured credit unions into banks.

The proposal included six changes to the NCUA’s rules, eliminating several provisions that are overly prescriptive and impose burdens on a credit union’s board of directors during merger deliberations.

This is from the letter:

Our comments are not meant to endorse credit unions converting to or merging into banks; however, we support the NCUA’s overall goal: Eliminating prescriptive procedural, disclosure, and communication requirements to reduce unnecessary regulatory burdens and give credit union boards more flexibility to exercise appropriate business judgment. We appreciate the NCUA’s efforts to move away from rigid, agency-defined processes.

Round 11

Today, The League submitted comments on two NCUA proposals:

• We wrote in support of an NCUAs proposal to increase two thresholds in its rules on implementing management official interlocks. Our credit unions told us that even if they do not plan to make use of the opportunities these changes would create, they strongly believe credit union boards should have the flexibility and authority necessary to govern their institutions effectively and efficiently within established regulatory parameters. “Our credit unions believe that allowing greater flexibility in management interlocks, where appropriate and consistent with statutory intent, would strengthen governance without diminishing the credit union movement,” the letter said. “Credit unions’ unique cooperative structure focuses on serving members rather than maximizing shareholder returns. Giving their boards more flexibility would support institutional growth, financial stability, and long-term sustainability while allowing credit unions to remain aligned with the realities of today’s financial services market.”
• We wrote to express support for the NCUA’s proposal to amend its share insurance rules by eliminating numerous provisions that merely cross-reference other provisions. This is meant to simplify the regulations and make it easier to navigate them, without changing the compliance obligations of federally insured credit unions.

The League thanks credit unions that submitted comment letters on these two rounds of proposals, particularly Kohler Credit Union, which has shared detailed feedback in each round of the Deregulation Project so far.

Watch for more NCUA proposals – on tougher topics

The NCUA issued 11 rounds in “Phase One” of its Deregulation Project, which included 31 separate proposals. The League replied to each of them on behalf of Wisconsin Credit Unions. NCUA staff is working to review the hundreds of comments received and finalize those rules.

Next, the NCUA will start Phase Two, which is expected to include more complex policy questions and operational issues that don’t just need a quick fix. This is likely to involve about 20 proposals over at least several rounds.

The League will send out Comment Calls, but we’ll need your input even more on these upcoming rounds. Please take some time to review each upcoming proposal and share your thoughts with us, even if it’s just a quick note to say that you support or oppose certain ideas and why. Credit union feedback is essential to make our comments more impactful. Our Open Regulatory Comment Calls page will be updated with information when each new proposal is published.

Compliance Roundtable – September 16 (In-Person)

Join members of The League’s compliance team as they lead a discussion on the latest changes in regulations and need-to-know information to keep your credit union in compliance. You can find more information or register on our website.