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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 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: www.nasbaregistry.org.

Contacts

Greg Neumann
E-mail: gneumann@woccu.org
Phone: +1 608-395-2048

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