World council urges support for regulatory proportionality
WOCCU joins credit union leaders from the U.S., Canada & Australia for meeting with Basel Committee on Banking Supervision
MADISON, WI (March 29, 2019) — World Council of Credit Unions led an effort Friday to persuade the Basel Committee on Banking Supervision to endorse proportionality—a practice that allows national and regional financial regulators to prescribe compliance standards for credit unions that are less burdensome than those required by Basel III and other international financial regulatory standards.
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 and other credit union officials voiced their support for proportionality in a meeting with Basel Committee Deputy Secretary General Neil Esho, arguing credit unions should not face expensive compliance standards that were written for multi-national banks.
“We support the Committee’s efforts to ensure the largest banks meet the capital and liquidity standards put in place by Basel III and other Basel Committee standards. But local jurisdictions should be encouraged to use their discretion to establish proportional regulations that are safe and sound, but less expensive and time-consuming for less-complex institutions such as credit unions,” said Edwards.
Joining World Council in making the case for proportionality to the Committee were 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.
CCUA, COBA and CUNA are all members of the World Council of Credit Unions.
The recommendations from World Council of Credit Unions and its members come on the heels of a March 2019 report from the Committee that shows most national and regional regulators already apply some form of proportionality—especially related to capital and liquidity requirements. These generally take the form of a modified version of existing Basel standards, or an exemption from such requirements.
About World Council of Credit Unions
World Council of Credit Unions is the global trade association and development platform for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented 300+ technical assistance programs in 90 countries. Worldwide, 82,758 credit unions in 97 countries serve 404 million people. Learn more about World Council's impact around the world at www.woccu.org.
