NCUA Chairman Engages with ‘REACH’ Attendees

National Credit Union Administration (NCUA) Board Chairman Mark McWatters

National Credit Union Administration (NCUA) Board Chairman J. “Mark” McWatters also addressed attendees at the REACH 2018 conference on Thursday as well, discussing the recent national mid-term elections and how NCUA board members are not approaching each other in a “divided” way—but diplomatically.

“You have to respect the other person, and there has to be a sense of collaboration,” McWatters said regarding working with Board Member Rick Metsger. “And you have to compromise. You have to realize it takes two people to make something happen.”

During the California and Nevada Credit Union Leagues' general session in Hollywood, CA, he reiterated that the agency’s only job is to regulate, and it should provide “targeted” regulations earmarked for risks to the National Credit Union Share Insurance Fund (NCUSIF)—no more. “Our job is nothing more than that,” McWatters added. “If there’s a risk, let’s tackle it. If there’s not, let’s not invent one. Credit unions are different and they should be regulated accordingly.”

Recent issues such as the NCUA’s Risk-Based Capital Rule, corporate stabilization insurance-fund rebates, real estate appraisal rule, guidance on loan securitizations, the appeals process, call report modernization, fixed-asset rule, pay-day lending, and many other topics have kept the agency’s board busy in responding to credit unions and crafting regulatory guidance over the past several months.

In response to an audience question, McWatters said he doesn’t know when the NCUA’s third and final board nomination process will begin. “When the lame-duck session of Congress reconvenes, it will run about four weeks. For NCUA nominees, chances are there is a Democrat and Republican opening. The democratic nominee is not a nominee yet. There needs to be a nomination, then a Senate committee hearing, then a vote by that committee, and then it goes to the Senate floor. Historically, there may not be enough time to move those nominees through. If they even do get through, you face them ‘expiring’ by the time the Senate recesses for this term—and then the president would have to re-nominate a Democrat and a Republican.”

McWatters also touched on cannabis banking operations in response to the audience. He talked about guidance issued over the past couple of years from the Department of Justice and the Financial Crimes Enforcement Network (FinCEN). “First, we have a public safety issue. We have a lot of cash on the streets that needs to go into the banking system to create an audit trail and accountability,” he said. “Also, sometimes all cash money isn’t declared for tax purposes. That’s where we are today. Anyone who’s thinking about being involved in this business needs to be within FinCEN guidance and also aware of the risk presented from the U.S. government.”

The agency’s chairman answered other attendees’ questions in the audience. But overall, he urged: “Let’s accomplish what we can on a bi-partisan basis. Right now we’re finding a way to make this agency work on behalf of credit unions. Working together in a collegiate and collaborative way where we all compromise and move forward with one another is vital.”

He added: “My job—and I think the job of all regulators should be—is to help you worry less as you’re managing your credit union. Our rules need to be broad-based, light-touched, and targeted to the problems presented. If we can continue making progress in this area, I will be very happy.”

Want a "recap" of REACH 2018? Visit the "REACH Onsite Live" news page! Also check out the REACH Social Wall—a round-up of social media posts. Or see Twitter (@CUatREACH). This year’s REACH 2018 conference—hosted by the California and Nevada Credit Union Leagues from Nov. 6 – 9—was held at the Loews Hotel near Hollywood & Highland (in Hollywood, CA), a world-class entertainment destination. The annual REACH conference is a premier event drawing 700 – 800 credit union leaders and system partners from across the United States.

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