NASCUS, the professional association of state credit union regulators, applauds CUNA Chairman Tom Dorety’s emphasis on the importance of capital reform in the “CUJ Q&A” feature of the May 19, 2008 edition of the Credit Union Journal.
Dorety states that Prompt Corrective Action (PCA) reform is critical to the future of credit unions. Further, he said regulators should have the ability to assess credit union risk and enable them to act appropriately based on that risk.
“I think we should be put on an even basis with banks, as far as the level of capital that is required,” stated Dorety. “There is absolutely no reason for this not to happen.”
He also noted that secondary capital options, or alternative capital, should be reviewed as a means to help credit unions with growth and economic challenges. “Give us another tool to manage what we are doing,” Dorety explained.
NASCUS and state regulators share Dorety’s belief that capital reform is necessary for credit unions’ continued growth and enhanced ability to serve its members.
NASCUS has long supported capital reform for credit unions, including alternative capital. NASCUS formed a Capital Modernization Subcommittee that studies capital reform solutions and we have testified before Congress on the importance of capital reform to regulatory relief and safety and soundness.
At the 2007 State System Summit, renowned capital expert Dr. William Jackson told attendees that American credit unions “can do better, much better” regarding capital reform. NASCUS agrees with Dr. Jackson and will continue its efforts to support capital reform and alternative capital for credit unions.
We look forward to working with Mr. Dorety and others to achieve comprehensive capital reform for credit unions.
Mary Martha Fortney
NASCUS, Arlington, Va.
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