Letter says any consolidation of financial regulators involving the NCUA would be devastating.
Merging the NCUA with one or more financial regulators is a poor idea that should be abandoned, CUNA President/CEO Jim Nussle said last week in a letter to Comptroller General Gene Dodaro.
“As the representative of the entities that fund NCUA, we do not believe NCUA should be eliminated and its functions consolidated into a larger federal banking regulator,” Nussle wrote in a letter to Dodaro last week.
The Government Accountability Office—which Dodaro heads—recently listed federal financial regulators among the “high risk” functions of the federal government. The GAO has listed financial regulators in the “high risk” category in the past, as well.
The system remains inefficient, with multiple agencies having overlapping authority, resulting in inconsistent enforcement of laws, the report found. The GAO concluded that Congress should consider changes to the system to reduce this “fragmentation and overlap” in oversight.
Inside the CUNA Letter
The merging of the NCUA with any regulator would be devastating because it would diminish the viability of the credit union charter, according to Nussle.
“NCUA is unique because it is the only financial regulator that is both an insurer and primary functional regulator,” he wrote. “To reflect this dual function, its overall funding is derived from both a transfer from the share insurance fund and operating fees charged to credit unions.”
The NCUA is funded by credit unions, not taxpayers, Nussle noted.
“Further, credit unions—not taxpayers—are called on to provide NCUA additional funds if the agency or the share insurance fund require additional funding,” he stated. “There is no compelling reason to change that arrangement.”