NAFCU: NCUA’s Proposed Derivatives ‘Pay To Play’ Rule Bad Precedent

WASHINGTON, DC (May 16, 2013) National Association of Federal Credit Unions (NAFCU) President and CEO Fred R. Becker Jr. today expressed serious concerns regarding the National Credit Union Administration’s (NCUA) proposed derivatives rule. Allowing credit unions greater authority and flexibility in how they invest is a critical tenet of NAFCU’s comprehensive five-point plan for regulatory relief.

“NAFCU has strongly advocated for expanding credit union investment powers that includes limited derivatives authority. As such, we appreciate that NCUA has continued the rulemaking process.

“A key aspect of NCUA’s proposed rule seeks to establish a ‘pay-to-play’ regulatory scheme for credit unions that seek to, and subsequently  are permitted to, engage in derivatives activities. A ‘pay-to-play’ requirement would be a first for our industry and would create a significant long-term strategic question by potentially setting a precedent for other activities that credit unions might seek to engage in the future.

“Consequently, NAFCU has very significant concerns regarding this approach since it may create a barrier to entry, as well as divide the industry.

“Regarding NCUA’s final rule on technical amendments, NAFCU is pleased that the agency has acted on our specific call to clean up outdated or incorrect parts of its regulations.”

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The National Association of Federal Credit Unions is the only national organization that focuses exclusively on federal issues affecting credit unions, representing its members before the federal government and the public.

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