CUNA, World Council urge Basel III proportionality implementation
Joint letter issued to U.S. Congressional Committee
WASHINGTON, D.C (September 14, 2023) — The Credit Union National Association (CUNA) and World Council of Credit Unions (WOCCU) sent a letter Thursday addressing the implementation of a Basel III proportionality framework to establish a simpler and more reasonable approach for credit unions to leaders of the U.S. House of Representatives’ Financial Services Committee.
“We support the Federal Reserve’s consideration of adopting the final pieces of the Basel III framework for banks under their purview. However, it is important to understand the proportionality built into the framework that must allow for tailoring for credit unions. Any such amendments must allow for this approach to allow for diversification in the marketplace and to allow community-based financial institutions to continue to serve their communities,” the letter reads.
CUNA and WOCCU sent the letter to coincide with Thursday’s Committee hearing entitled: Implementing Basel III: What’s the Fed’s Endgame?
“The Basel Committee itself has noted simpler approaches and adapted regulations could be suitable for smaller, non-internationally active financial institutions, and NCUA has taken that approach even further for U.S. credit unions, tailoring certain requirement for size, risk and complexity,” said CUNA Deputy Chief Advocacy Officer for Federal Government Affairs Jason Stverak. “We believe the proportional approach ensures applicable rules and regulations are consistent with credit unions’ relative systemic importance.”
“Basel III was intended for large, internationally active banks. Without proper proportionality contemplated in the framework, the disproportionate regulatory burdens associated with Basel III will continue to exacerbate the ’Too-Big-To-Fail’ problem by increasing the market power of the largest deposit-taking institutions, while increasing consolidation among community-based deposit taking institutions,” said Andrew Price, WOCCU Senior Vice President of International Advocacy and General Counsel.
CUNA and WOCCU urged G20 leaders last March to provide direction to international standard setting bodies to work with national-level regulators on proportionality for the purposes of advancing financial inclusion.
Credit Union National Association (CUNA) is World Council’s direct member organization in the United States.
Andrew Price
Jason Stverak
About World Council of Credit Unions
World Council of Credit Unions is the global trade association and development platform for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented 300+ technical assistance programs in 90 countries. Worldwide, 82,758 credit unions in 97 countries serve 404 million people. Learn more about World Council's impact around the world at www.woccu.org.
