WOCCU seeks further guidance on regulatory proportionality

World Council follows up Basel Committee meeting with letter asking for additional instruction

MADISON, WI (April 4, 2019) — Following a meeting between the Basel Committee on Banking Supervision and representatives of the worldwide credit union industry last week, the World Council of Credit Unions (WOCCU) wrote to the Committee Wednesday seeking further guidance on when less-complex regulatory approaches can be warranted for credit unions.

In its letter, WOCCU urged the Basel Committee to issue a set of high-level principles or weighing-factors national- or regional-level regulators can consider, noting many policymakers continue to feel obligated to apply Basel III and other Basel Committee standards to non-complex, purely domestic deposit-taking institutions such as credit unions.

Basel III is the global financial regulatory framework adopted by the Committee in response to the financial crisis of 2007-09, which aims to strengthen the regulation, supervision and risk management of banks.

World Council Senior Vice-President and General Counsel Michael Edwards noted in the letter the Basel III framework is intended only for internationally-active banks.

World Council asked the Basel Committee to consider issuing high-level principles or weighing factors for considering proportionality, such as:

  • Whether the institution has cross-border operations.
  • The complexity of the institution’s assets.
  • The asset-size of the institution.
  • The institution’s interconnectedness to the financial system.
  • The degree to which the institution reports to multiple prudential supervisors.
  • The extent and nature of the institution’s off-balance-sheet exposures.
  • The mix of business activities of the institution, such as whether it  engages in community banking, commercial banking and/or investment banking.

World Council also asked the Basel Committee to welcome public consultation on the issue from a range of smaller banking institutions, such as credit unions, joint-stock community banks, savings banks, building societies and other cooperatives.

The letter followed an effort led by WOCCU making the case for proportionality to the Basel Committee last week with several representatives of the credit union industry, including Canadian Credit Union Association (CCUA) President & CEO Martha Durdin, Customer Owned Banking Association (COBA) President & CEO Mike Lawrence and Credit Union National Association (CUNA) Chief Advocacy Officer Ryan Donovan.

About World Council of Credit Unions

World Council of Credit Unions is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website:


Greg Neumann
Phone: +1 608-395-2048

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