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NCUA’s Mark McWatters Visits with Cornerstone Management Team in Plano Office
Thursday, January 5, 2017 6:55 AM

Mark McWatters Meeting

On Wednesday, NCUA board member Mark McWatters met with Cornerstone’s management team in its Plano offices for roughly two hours to discuss the issues affecting credit unions, including the incoming administration of President-elect Donald Trump and how it might change Washington, the CFPB, and tax reform, among other topics. Cornerstone, Resources, and Foundation staff had the opportunity to ask questions of McWatters in a frank, open, and honest conversation.

The first question asked by Cornerstone President/CEO Dick Ensweiler was what the incoming administration’s impact will be on the NCUA board. McWatters explained how the president-elect’s approach has been far different from what Washington normally experiences following a presidential election.

“Usually, when there are outsiders to D.C. coming in, the establishment gloms on to them with statements like, ‘I’ve paid my dues, it’s my time,’” explained McWatters. “It’s entirely different with Mr. Trump. He’s picking his own people.”

Jokingly, McWatters added that, in his opinion, the open slot on the NCUA board is not likely to be a first priority for the incoming administration and that it might be another six to eight months before that seat is filled.

Ensweiler asked what the short-term focus would be for NCUA, to which McWatters responded, “A lot of focus on defending lawsuits,” as a result of field of membership and member business lending rules.

On the CFPB, McWatters feels that it’s difficult to argue against consumer protection, but an agency can regulate in a way that puts people out of business and the CFPB is acting in a way in which that can happen. “You are going to take a cooperative business and force them to pull out of offering services like alternative payday loans that then drives consumers to payday lenders.”

Mark McWatters MeetingMcWatters also discussed the exam appeals process and suggested the NCUA is moving intently on this and that they're going to move it a step further down the road in the short term. “The thought that there is retaliation against a credit union that speaks its mind is abhorrent,” explained McWatters. “But I keep hearing about it every time I go out, and usually when there’s smoke, there’s fire.”

With regard to regulatory burdens, McWatters took a deep breath and said, “I would like to think we’ve been making progress over the last year. Whether there be more—yes, absolutely. But, what does regulatory relief mean?"

“What I need to know is, what is regulatory burden?” added McWatters. “Let’s bring it down to earth. Why are [certain regulations] burdensome, and how can the same goal of certain regulations be accomplished more efficiently and effectively?”

McWatters went on to explain that credit unions need to go beyond saying, “We need regulatory relief.” They need to take it a step further and tell regulators specifically what they would like changed to ease the burden while keeping the goal of the regulation in place.

Cornerstone SVP Regulatory Compliance Suzanne Yashewski recommends that credit unions be proactive in providing the details on how this can happen. For example:

"Mailing out an annual privacy notice is expensive and time consuming for credit unions with little benefit to members when the policy has not changed. I would like to see this requirement eliminated." (Because of our tremendous grassroots effort, we have already eased the regulatory burden to amend privacy notice requirements.)

Finally, McWatters addressed the potential for tax reform. “We are due for a top-to-bottom rewrite of the Internal Revenue Code,” he said. “Everything is on the table.” This includes the credit union tax exemption.

McWatters challenged credit unions to be prepared and vigilant in defending the tax exemption right now.

To send your comments on the impact of regulatory burdens on your credit union, staff, and members, contact Suzanne Yashewski at or 800-442-5762, ext. 8516.

Also, CUNA continues to ramp up its campaign for common-sense regulation. To learn about the initial steps credit unions can take to get involved in this yearlong campaign, tune in to the campaign-launch webinar at 1 p.m. (CT) Tuesday, Jan. 10.