REGULATORY REACTION: HIT OR MISS
updated 07/30/14 09:50 AM
Leaders Discuss the Changing Landscape
The credit union industry’s overwhelming response in sending more than 2,000 letters to the National Credit Union Administration (NCUA) on the agency’s risk-based capital proposal is extremely rare. So what’s different this time around?
A dramatic shift could be under way. Traditionally, engaging with regulators is outside the course of daily operations, which means it’s not top of mind. There’s no immediate positive impact to member service or revenue.
But contentious proposals issued by the NCUA and Consumer Financial Protection Bureau (CFPB) with long-standing consequences may be in store for the foreseeable future. The deep imprint from rule-making is real—and combined with today’s active regulatory environment, many credit union leaders say the industry could be ripe for taking extensive action more often going forward.
Professionals submerged in regulatory advocacy during the past couple of decades remember those few instances when the industry countered forcefully. One memorable example arose in 1995 when 12,000 credit unions existed. After NCUA issued a proposal on corporate credit unions, our movement argued the rule would hinder corporates’ ability to provide competitive products and generate sufficient income. More than 1,300 comment letters were received.
Is today’s momentum behind risk-based capital a sustainable force? The broader ramifications could be incendiary, or not—or at the very least a moment of truth for everyone involved on where you stand, and why.
We encourage readers to make their own conclusions as they review the following opinions on where regulatory advocacy stands today, where it’s been, and where it’s headed. Those on the front lines know their chances of success are hit or miss, and that’s not stopping them.