WASHINGTON, D.C. (November 14, 2024) |
Today, the Defense Credit Union Council, DCUC, sent a letter to Chairman Patrick McHenry (R-NC) and Ranking Member Maxine Waters (D-CA) of the House Financial Services Committee ahead of its hearing titled "Oversight of Prudential Regulators," urging the Committee to protect the independence of the National Credit Union Administration (NCUA). DCUC stresses that NCUA's independence is essential to maintaining the mission and unique structure of credit unions, particularly those serving military and veteran communities.
The NCUA, established in 1970 as an independent federal agency, provides tailored oversight to credit unions, aligning with their not-for-profit, member-owned structure. This specialized oversight allows credit unions to prioritize member benefits over profit, with services like lower loan rates, higher savings yields, and minimal fees. Unlike banks, credit unions' Share Insurance Fund is funded solely by credit unions and operates independently of taxpayer funding, shielding it from banking sector risks.
DCUC’s Chief Advocacy Officer, Jason Stverak, also highlighted the risk posed by proposals to consolidate financial oversight under a single regulator, citing that one-size-fits-all regulations historically have burdened credit unions with excessive compliance costs. For instance, regulatory expenses following the Dodd-Frank Act impacted credit unions, costing them approximately $6.1 billion annually, according to a Filene Research Institute study.
While advocating for NCUA’s independence, DCUC proposes reforms to enhance NCUA’s effectiveness. These include increasing budget transparency, investing in modernization, adopting a balanced regulatory approach, and enhancing collaboration with the Department of Defense to better support military families.
Stverak wrote, “As the Committee conducts oversight of prudential regulators, we urge you to recognize the importance of NCUA’s independence and its role in preserving the unique value of credit unions. By adopting the reforms outlined above, NCUA can continue to provide tailored, effective oversight while supporting the mission-driven focus of credit unions serving communities across the nation.”
DCUC stands ready to engage in discussions to ensure the interests of credit unions and their members are fully represented. For more information, contact Jason Stverak at jstverak@dcuc.org.