WASHINGTON, D.C. (November 18, 2024) |
Today, the Defense Credit Union Council (DCUC) sent a letter to Rohit Chopra, Director of the Consumer Financial Protection Bureau (CFPB), urging equitable treatment of credit unions in the CFPB’s proposed expansion of deposit insurance coverage.
In the letter, DCUC emphasized the importance of maintaining historical parity between credit unions and banks in deposit insurance frameworks. Jason Stverak, DCUC Chief Advocacy Officer, highlighted the critical role of the National Credit Union Share Insurance Fund (NCUSIF), established in 1970 and modeled after the Federal Deposit Insurance Corporation (FDIC), in safeguarding credit union members’ deposits.
“The NCUSIF has always mirrored FDIC insurance coverage levels, offering consumers equal protection regardless of their chosen financial institution,” says Stverak. “This parity has been essential to maintaining public confidence in credit unions, particularly during times of economic uncertainty.”
DCUC’s letter highlighted three key priorities for ensuring equity in the proposed changes:
Parity in Coverage Levels: Deposit insurance coverage under the NCUSIF and FDIC has consistently been identical, ensuring equal consumer protection. This standard must continue in any expanded coverage framework.
Flexibility in Implementation: Credit unions, especially smaller institutions, often operate with leaner resources than banks. Policies must allow credit unions to adapt to expanded coverage requirements without undue burden.
Acknowledgment of Cooperative Structure: As member-owned, not-for-profit entities, credit unions operate under a unique cooperative model. Regulatory changes must account for this distinction to avoid creating competitive disadvantages.
DCUC also stressed the resilience of the NCUSIF and FDIC during economic challenges such as the 2008 financial crisis and the COVID-19 pandemic, further highlighting the importance of equal treatment in any future deposit insurance expansion.
“Director Chopra’s commitment to enhancing consumer confidence and financial stability is commendable. However, it’s vital that any new requirements ensure parity and reflect the unique structure of credit unions,” said Stverak. “DCUC remains committed to collaborating with agencies to ensure that expanded deposit insurance coverage serves all consumers equitably. Parity between banks and credit unions in both flexibility and regulatory requirements is essential to maintaining a balanced financial services ecosystem that promotes choice, competition, and consumer confidence.”
For more information, contact Jason Stverak at jstverak@dcuc.org.