Press
NAFCU letter in advance of Treasury Secretary Jack Lew’s FSOC testimony before HFSC
(June 17, 2015) —
Honorable Jeb Hensarling
Chairman
House Financia Services Committeee
United States House of Representatives
Washington, D.C. 20515
Honorable Maxine Waters
Ranking Member
House Financia Services Committeee
United States House of Representatives
Washington, D.C. 20515
Re: The Financial Stability Oversight Council Annual Report to Congress
Dear Chairman Hensarling and Ranking Member Waters:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents the interests of our nation’s federal credit unions, I write today as the committee prepares to receive testimony from Treasury Secretary Jack Lew in his capacity as the Chairman of the Financial Stability Oversight Council (FSOC). NAFCU member credit unions appreciate the committee’s oversight with respect to this body of regulators. We are hopeful that the FSOC will take seriously its duty to facilitate regulatory coordination for our nation’s credit unions and their 100 million member-owners.
As members of the committee are aware, our nation’s credit unions are struggling under an ever-increasing regulatory burden. Credit unions, many of which have very small compliance departments, and in some instances a single compliance officer, must comply with the same rules and regulations as our nation’s largest financial institutions that have the luxury of employing armies of lawyers. Furthermore, these compliance burdens are often compounded as new rules and regulations flow out of multiple regulators, often with little coordination on when they are released. As member-owned cooperatives, the resources spent on regulatory compliance at credit unions are undoubtedly taking away from the services and products credit unions are able to offer to consumers.
As the tide of regulation rises, there has never been a more critical time for the FSOC, led by Secretary Lew, to facilitate regulatory coordination among its member regulators. This duty includes facilitating information sharing and coordination among the member agencies of domestic financial services policy development, rulemaking, examinations, reporting requirements and enforcement actions. NAFCU appreciates the committee’s focus on the activities of the FSOC and looks forwarding to learning more about the steps that have been taken to avoid duplicative and over burdensome regulation of our nation’s credit unions.
Additionally, in its 2015 Annual Report to Congress, FSOC recommended giving the National Credit Union Administration (NCUA) third-party vendor examination authority. NAFCU and our members strongly oppose this recommendation. As the committee is aware, NAFCU has consistently and vigorously opposed giving NCUA’s direct third-party vendor examination authority. Such authority would impose significant costs on credit unions, while providing little benefit and no clear relief to the industry. While NAFCU acknowledges the importance of cybersecurity and risk management, we firmly believe that cybersecurity and third-party vendor examination authority do not go hand in hand.
Thank you for the opportunity to comment on these issues of great importance to our nation’s credit unions. If you have any questions or would like further information, please do not hesitate to contact me or NAFCU’s Director of Legislative Affairs, Jillian Pevo, at (703) 842-2836.
Sincerely,
Brad Thaler
Vice President of Legislative Affairs
cc: Members of the House Financial Services Committee