WASHINGTON — With all three member of the NCUA Board talking about reinterpreting statutes related to everything from field of membership rules to access to secondary capital, credit union executives were feeling just a little less under the gun at this year's CUNA Governmental Affairs Conference.
Black Hills FCU CEO Roger Heacock summed it up best at the NCUA Board and Regional Directors' "Meet and Greet" when he said, "It just feels so much less confrontational than this time last year."
And no wonder. This time last year, NCUA was refusing to consider extending the comment period on its first proposed rule on risk-based capital. Now, the agency is in the midst of a second comment period on its revised RBC proposal, but more importantly, Chairman Debbie Matz specifically talked about taking a hard look at revising existing interpretations of CU statutes that might allow for extending at least some access to secondary capital without having to go to Congress.
"There's only so much we can do without going to Congress," Matz told Credit Union Journal at GAC. "But we can look at what we can do for low-income credit unions, for example, without any statutory change."
During her speech at GAC, Matz outlined her desire to make 2015 "The Year of Regulatory Relief," saying, "my intent is for the risk-based capital rule to be the last significant safety and soundness rule change for the foreseeable future."
Similarly, Vice Chairman Rick Metsger also talked about exploring which issues fall under NCUA's purview, as well as how the agency can reinterpret existing statutes to create a stronger federal credit union charter without first having to get new laws passed by Congress.
"Some of my first visits with credit unions after I joined the NCUA board were all about field of membership," Metsger told Credit Union Journal following his open mic session on FOM rules. "I really believe this is the most important thing we can do for credit unions to help them succeed. I'm about looking more inward to the things that we can control, and I am of the conviction that field of membership is a universal issue that has many tentacles to it. Truly, this has the potential to be so much more powerful and more important than any of the other issues out there. We have to make this job one."
And then there is the newest member of the NCUA Board, Mark McWatters. When Credit Union Journal asked random GAC attendees who and what were the most interesting and important things they had heard at the conference, many said it was McWatters.
Noting his past experience as a lawyer, CPA, college professor and his time serving as a member of the Troubled Asset Relief Program Congressional Oversight Panel, McWatters said, "it is objectively clear that NCUA should not regulate credit unions as if they are, indeed, too big to fail or that they present a systemic risk to the U.S. economy and taxpayers similar to that presented by the large money-center, too-big-to-fail financial institutions."
True regulatory relief, he said, comes from "a thoughtfully targeted reconsideration of NCUA's regulatory philosophy directed so as to assist a broad swath of credit unions in better serving their members and enhancing the cooperative financial services model, while maintaining the safety and soundness of the Share Insurance Fund."
Already something of a darling of the CU movement by virtue of his lone dissenting vote against risk-based capital, McWatters has further endeared himself to credit union executives for his call for a public hearing on NCUA's budget and championing the idea that the agency should focus more attention on addressing fraud than on promulgating more rules.
Perhaps his only misstep, if it can even be called that, might be his position on raising NCUA's definition of "small credit union." Currently set at $50 million, the agency has proposed raising that threshold to $100 million. McWatters has said he's prepared to vote for that, but he would actually prefer to see it set even higher at $250 million, or even all the way to $550 million, which is the definition used by some bank regulators.
While there are many credit unions who favor raising the asset threshold, many have been surprised at the backlash from credit unions with less than $50 million in assets. Count McWatters among them.
"I was surprised by that," McWatters told CU Journal at the NCUA reception. "If I'd realized that there was going to be confusion about what we're trying to achieve with this and what is — and isn't — going to be affected by it, I would have included this in my statement."
The idea, he said, is to extend as much regulatory relief to as many credit unions as possible, but changing the definition of "small" would not be intended to impact where and how the Office of Small CU Initiatives devotes it resources.