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September 25, 2008 - NASCUS wrote to Congressional leaders September 24 to caution them against considering any regulatory restructuring in legislation to address the economic market trouble. NASCUS also expressed its support for the inclusion of credit unions in the Troubled Asset Relief Act (TARA) to ensure the competitiveness of the credit union system remains strong.
Since the release of the U.S. Treasury's Blueprint for a Modernized Financial Regulatory Structure, state credit union regulators have been concerned that the U.S. Treasury will influence Congress to act on provisions in the Blueprint that would eliminate dual chartering, remove a separate credit union regulator and bring state chartered institutions under federal supervision. NASCUS explains that a time of crisis is not the appropriate time for regulatory restructuring and that regulatory reform should be thoughtfully deliberated and carefully considered by Congress.
“State regulators urge Congress to be deliberative in considering any proposals that would restructure the regulatory system in a way that would damage state authority, dual chartering or the state credit union system,” stated NASCUS.
The letter also asked Congressional leaders to consider several factors while working with their colleagues, the Administration and the Treasury including flexibility with regard to prompt corrective action to credit unions insured by the National Credit Union Share Insurance Fund (NCUSIF). NASCUS also detailed that while historically credit unions have not or are expected to be the recipient of federal “bailout,” they should be offered the same options to sell problem loans to the government as other financial institutions as provided in TARA.
NASCUS sent the letter to House Financial Services Chairman Barney Frank (D-Mass.) and Ranking Member Spencer Bachus (R-Ala.), as well as Senate Banking, Housing and Urban Affairs Committee Chairman Christopher Dodd (D-Conn.) and Ranking Member Richard Shelby (R-Ala.).
The letter can be viewed here.
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