WASHINGTON — National Credit Union Administration Chairman J. Mark McWatters called for balanced regulation on Monday and made an appeal to credit union executives to work with small community banks when it comes to advocating for shared goals.
McWatters is reportedly on the Trump administration’s short list to be the next director of the Consumer Financial Protection Bureau, but bankers have raised concerns over the potential appointment, saying McWatters has displayed a preference for credit unions' nonprofit business model.
During a speech at the Credit Union National Association's government affairs conference on Monday, McWatters said banks and credit unions should move beyond their rivalry, which largely stems from credit unions' tax exemption.
“It’s worth considering whether the credit union and community banking communities could benefit from a ‘Come now, and let us reason together’ approach to create opportunities for addressing their differences as well as the common challenges facing these essential Main Street financial institutions in an evolving consumer-driven marketplace,” McWatters said in his prepared remarks.
“Working together in good faith with mutual respect for the other reflects strength, not weakness,” he said.
However, at a separate event earlier in the day, executives from midsize banks lamented the credit union tax exemption and said Congress should reevaluate credit unions' business model.
“Let’s talk about the third-rail issue here and that is called the credit unions,” John Asbury, CEO of the $9 billion-asset Union Bank & Trust in Richmond, Va., said at the event, which was sponsored by the law firm Jones Walker. “I know that Congress doesn’t really want to touch that issue because [credit unions] are so politically powerful, but that really needs to be addressed.”
During his speech to the credit union executives, McWatters called for regulation and supervision that is tailored and targeted, and respects “credit unions to make their own business decisions while allowing for innovation and growth that strengthens the credit union system and, as such, the Share Insurance Fund itself.”
He also pointed to the Administrative Procedure Act, which requires regulators to solicit comments from stakeholders and consider costs and benefits when writing new rules.
“While we may agree to disagree on certain issues, please understand your voices are heard, both as specifically prescribed by the Administrative Procedure Act and as a matter of our governing philosophy,” McWatters said. “We will continue to welcome your ideas and approaches and will discharge our responsibilities in a measured, deliberate, and transparent manner.”