WASHINGTON–NCUA Chairman Kyle Hauptman will appear today during a Senate Banking hearing titled “Update from the Prudential Regulators: Rightsizing Regulation to Promote American Opportunity.”
Also testifying will be Michelle Bowman, chair for Supervision, with the Federal Reserve; Travis Hill, chairman of the FDIC, and Jonathan Gould, Comptroller of the Currency.
The hearing begins at 10 a.m. ET. The CU Daily will have full coverage.
In advance of the hearing, America’s Credit Unions said it sent a letter to NCUA that calls for the agency to pursue targeted capital relief for credit unions to match the November proposals from banking regulators, including:
- Lower the Complex Credit Union Leverage Ratio to 8% (from the current 9%)
- Modernize its subordinated debt rule to make this source of loss-absorbing capital more usable
- Update the “complex credit union” asset threshold and stress-test tiers to reflect inflation and industry growth
- Consider narrowly tailored legislative options, such as adjusting the Federal Credit Union Act’s fixed-dollar definition of a “new credit union.”
In addition, America’s Credit Unions urged NCUA to:
- Pursue meaningful regulatory relief that supports new charter formation
- Clarify exactly what custodians of stablecoins or stablecoin reserves may do with those funds beyond general safekeeping
- Align with recent federal financial regulatory examination reforms by modernizing examination scope and frequency, and clarifying the standards for “unsafe or unsound practices;” and formal examination findings.
- Consider working through the Federal Financial Institutions Examination Council (FFIEC) to modernize the CAMELS rating system, with a particular focus on the “M” (Management) component.
Senate Dems Flag Concerns Over Removal of Disparate Impact
Separately, Sen. Elizabeth Warren (D-MA), and other Democrat senators sent a letter NCUA, the FDIC, and the Office of the Comptroller of the Currency flagging concerns about the removal of disparate impact from exams.
As the CU Daily reported here, in September NCUA eliminated references to disparate impact in all materials in response to an Executive Order from President Trump.
In their letter, the senators pointed to what they said has been decades of “institutionalized financial discrimination through processes such as redlining,” and suggested that “removing disparate impact ties examiners’ hands and makes it much harder to uncover discrimination by banks, credit unions, mortgage originators, and other lenders.”
The letter calls for restoration of disparate impact in examination manuals.
“Credit unions promote access to financial services and advocate for policies that allow them to reach underserved communities, many of which have been left behind by banks,” Scott Simpson, president/CEO of America’s Credit Unions, said in a statement. “We appreciate the senators’ concerns about discriminatory practices, but oftentimes these policies create more burdens without solving the problem.”
