NCUA CHAIRMAN JOHNSON OUTLINES 2006 REGULATORY FOCUS FOR
AMERICA’S CREDIT UNIONS
Des Moines, IA, February 7, 2006 – In an address before the Iowa Credit Union League’s Annual Conference, National Credit Union Administration (NCUA) Chairman JoAnn Johnson outlined the NCUA’s regulatory focus for 2006 and highlighted opportunities and challenges for the nation’s credit unions.
“While 2005 presented many challenges, this year’s opportunities are expected to be met with progress and solutions which will further underscore the significant role of credit unions in today’s society,” said Chairman Johnson. “With a full complement of the new NCUA Board, we are positioned to accomplish great initiatives to further strengthen the well-being of the nation’s credit union system. I anticipate a year of progress that is forward-focused.”
The chairman said that she will continue to lead with a regulatory philosophy of “earned flexibility” for federal credit unions, as demonstrated with the recent final rule of lowering the RegFlex qualifying net worth ratio from 9% to 7% for well-managed, well-capitalized credit unions.
Reforming Prompt Corrective Action (PCA) remains a priority from which the NCUA cannot waver, says Chairman Johnson. “Credit union capital standards should not be one-size-fits-all, and instead should recognize risk-based factors in an individual credit union’s balance sheet. This is an issue which will require greater effort for the regulator and regulated in working with Congress to bring this important safety and soundness priority to fruition. We look forward to continuing dialogue with Congress to reform PCA.”
Chairman Johnson said the increased focus on “enhancing clarity” and collecting data that demonstrates credit union service to persons of modest means will likewise be a priority for the NCUA. “I have long believed that credit unions are meeting their mission of service. I am confident that the NCUA will utilize resources to collect and demonstrate service to persons of modest means in a way that is effective, and not burdensome for credit unions.” The NCUA intends to announce the process for data collection in the very near future, according to the chairman. “I know credit unions are eager to learn more of this process and I assure you that the NCUA is focused on this being a productive and worthwhile evaluation.”
Additional priorities in 2006 announced include the following areas:
- Maintaining the “wise stewardship of agency resources” in the budget and allocation of resources, and further develop the long-term strategic direction for the NCUA;
- Remain steadfast in enhancing a safe and sound federal credit union charter, share insurance fund, and opportunities for credit unions to mitigate risks;
- Evaluate opportunities to implement a risk-based capital structure for the corporate credit union system;
- Monitor and support the ongoing recovery for the safety and soundness of credit unions affected during the hurricane catastrophes;
- Continue to support regulatory improvements before Congress and enhance the agency’s interaction on Capitol Hill, along with other financial regulatory agencies at the federal and state levels;
- Further broaden partnerships for the agency’s Access Across America outreach initiative and continue to empower credit union service in underserved areas;
- Routinely review and update where necessary the low-income credit union designation regulations and other pertinent rules designed to encourage the establishment and long-term financial viability of community development and low-income credit unions; and
- Continue to encourage safe and sound credit unions to consider providing member business lending services to facilitate access to capital and credit for their members’ small businesses.
“Our foremost priority is safety and soundness for all federally insured credit unions,” said Chairman Johnson. “However, we should be on a course that recognizes credit unions must have a regulatory environment that does not stifle innovation and flexibility, but rather positions credit unions to flourish for the benefit of their membership and the continued vitality of the institution.”
NCUA is the independent federal agency that charters and supervises federally insured credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, operates the National Credit Union Share Insurance Fund (NCUSIF), insuring the savings of 85 million account holders in all federal credit unions and the majority of state-chartered credit unions.
|
