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Cornerstone CUs Talk Regulatory Relief with CU Journal
Friday, April 24, 2015 6:30 AM

Credit Union Journal reporter Michael Bartlett attended Cornerstone's 2015 Annual Meeting in Austin this month, reporting on a standing-room-only breakout session about regulatory relief featuring NCUA Board Member Mark McWatters. Afterward, Bartlett interviewed attendees on what regulatory relief they would most like to see. Following are some of the responses.

Energize CU Manager Jason Boesch said, "I think the list could be endless—if you could name it, there is a regulation that needs to be relaxed. I also am concerned about what is still to come from CFPB. Who knows what they will think of next?" He added, "The Truth in Lending implementation has been monkeyed about so much in the last several years we virtually cannot do any open-ended lending any more. Lending now takes more paper, more time and is more difficult for the members."

"The risk-based capital regulation should not even be on the books," said Armando Martinez, president/CEO of Kingsville Community FCU in Kingsville. "I manage a small credit union with $14 million in assets. I see a lot of mergers with small credit unions. My concern is the supervisory examiners are not handling examinations well and are causing us to be merged out. I do not know what the proper channels are to get my concern addressed. I see credit unions in my area being merged out without getting a chance to correct their supposed issues."

"What really bugs the heck out of me is the field of membership rule," said Robert Hamer, president and CEO of Mobiloil FCU in Beaumont. "It seems to be more of an accommodation to the banks than logical. If the MSA is San Diego, that is millions of people within a few square miles. But many of us work with areas that are big geographically but have a small population. If credit unions can show that their growth or service is constrained, they need to be able to expand to an adjacent MSA." Hamer added, "In today's world of electronic delivery, and in our case, with the people who work in the oil industry moving around all the time, there is no reason not to serve broader areas. We have members in 40 of 50 states, but we cannot put a branch in Houston to serve our members there. Why not let us?"

"We are looking at risk-based capital," said Dee Donald Crisp, CEO for Government Employees FCU in Austin. "NCUA needs to remember that credit unions have a system that is effective. The vast majority of losses during the financial crisis were due to corporate credit unions.RBC2 saw some improvements in the risk weightings, but there is a problem with a two-tiered system. We all are in the business of managing risk every day. No one wants to take on more risk than their credit union can handle."

"I would like to see the CFPB demonstrate that it knows we are different from banks," DPS FCU (Oklahoma City) accountant Michele Douglas said. "That want to come down on credit unions, but they do not take into account we were not the problem that led to the financial crisis. The CFPB could exempt us, but they don't."

Related article: McWatters—Nothing More Important Than Speaking to CUs