A call for action to the NCUA and state regulators
The beginning of a New Year gives everyone an opportunity for a fresh start, to do things better and try to improve the lives of others if you are in a position to do so.
As a former state and federal regulator of the financial services industry, my vision of regulation was simple. There should be as much as necessary and as little as possible.
As much regulation as necessary means enough to ensure the safety and soundness of our depository institutions. As little as possible means not so much as to impair the ability for credit unions to help homeowners, small businesses, earn income and serve their members by providing quality financial services.
Five years have passed since the financial crisis. The corner has clearly been turned as we see the stock market soar to record highs, gas prices fall to almost $2.00 a gallon, low cost mortgages for home buyers, a continued decline in unemployment and indications that 2015 will bring even better economic conditions.
What is amazing about this turnaround is that it was achieved by the hard work of private enterprise and not by any action of the federal government. In fact, the inaction by Washington probably helped business further along the road to recovery.
Now that we are on the right track to a more prosperous environment for the citizens of our country and businesses are once again thinking of expansion and hiring more people, it is time for regulators to do their part to help make sure that positive trend continues.
At the end of last year, NCUA announced that it would create study groups to see how the agency could help credit unions by relaxing member business lending regulations and perhaps creating a unique way to allow credit unions to access supplemental capital.
Study groups are an excellent way to foster dialog, generate ideas and provide recommendations. However, study groups, like pilot programs, have the ability to go on for too long. As a result, their ideas get heard later than sooner.
If these groups meet often during the first quarter, write their report during the second, present it to NCUA in the third, maybe, just maybe, NCUA could do move to implement their ideas in the fourth. More than likely, one year from now we will be hoping the regulator will take action in 2016. Another year will have passed and government will again have not done anything to help. Private industry again will have to do it on their own.
I challenge not only NCUA, but all federal and state regulators to take that one step back, to look with fresh eyes at those regulations no longer needed, regulations that stifle rather than strengthen, and within the first six months of 2015, identify those that should be changed, improved or eliminated. Then once identified, take the needed corrective action to move things along.
As much as necessary, as little as possible. Not rocket science, but clearly a way to provide the tools to our financial services industry to help businesses and our economy to continue to grow and improve.
