WASHINGTON — America’s Credit Unions is urging the National Credit Union Administration to continue eliminating outdated regulations and modernize a range of agency rules governing credit unions, according to a comment letter submitted to the regulator.
Separately, DCUC has filed a comment letter with FinCEN on its whistleblower program.
The recommendations were filed in response to the NCUA’s latest review of existing regulations under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) process, which seeks to identify outdated, unnecessary or unduly burdensome regulations.
Although NCUA is not required by law to participate in the EGRPRA review process, America’s Credit Unions praised the agency for voluntarily undertaking the review and continuing efforts to reduce regulatory burden.
The current review covers regulations related to:
- Corporate credit unions
- Directors, officers and employees
- Anti-Money Laundering and Bank Secrecy Act compliance
- Rules of procedure
- Safety and soundness
Recommendations Made
In its letter, America’s Credit Unions said the agency should continue evaluating regulations to ensure they are appropriately tailored to credit unions’ size, complexity and risk profiles.
Among its recommendations, the trade group called on NCUA to:
- Continue eliminating outdated, unnecessary and overly prescriptive requirements that increase regulatory burden without improving safety and soundness.
- Provide greater flexibility within corporate credit union regulations to help institutions better manage liquidity, capital and collateral in an evolving financial marketplace.
- Replace rigid procedural mandates with more flexible oversight frameworks that recognize differences among credit unions.
- Clarify and streamline anti-money laundering, Bank Secrecy Act, cybersecurity, records preservation and safeguarding requirements to allow institutions to focus resources on meaningful compliance efforts and member service.
- Modernize regulations affecting investments, appraisals, audits and liquidity access to promote innovation, operational efficiency and regulatory parity with banks.
Fodder for Future Reviews
America’s Credit Unions also encouraged NCUA to identify additional regulations for future review as part of its broader regulatory modernization efforts.
The trade group said reducing unnecessary regulatory requirements would allow credit unions to devote more resources to serving members while maintaining appropriate safety and soundness standards.
DCUC Submits Letter to FinCEN on Whistleblower Program
Separately, the Defense Credit Union Council (DCUC) has submitted its official comments regarding the Financial Crimes Enforcement Network’s (FinCEN) proposed rule establishing a whistleblower program designed to encourage reporting of potential violations of the Bank Secrecy Act (BSA) and other anti-money laundering and national security laws.
In its letter, DCUC expressed support for FinCEN’s efforts to strengthen the detection and prevention of illicit financial activity while offering recommendations to ensure the program complements existing compliance frameworks at credit unions:
“Credit unions serving military communities routinely encounter fraud, sanctions, and national security risks affecting servicemembers, veterans, and their families and understand firsthand the importance of safeguarding the financial system against criminal activities,” DCUC stated. “DCUC, therefore, strongly supports efforts to identify and deter illicit financial activity that threatens the integrity of the financial system and broader national security. While we support the objectives of this proposed rule and the vital role whistleblowers play in identifying significant violations, we offer recommendations to ensure the final rule strengthens compliance efforts without undermining effective internal controls.”
Recommendations Made
DCUC said its recommendations focused on several key areas:
- Encouraging Internal Reporting: DCUC supports provisions that preserve incentives for employees to utilize internal compliance channels, including FinCEN’s proposed 120-day waiting period before external reporting.
- Protecting Confidential Supervisory Information: DCUC requested clarification that whistleblower submissions do not authorize the disclosure of protected examination or supervisory materials.
- Maintaining High Standards for “Original Information”: DCUC urged FinCEN to establish rigorous standards and safeguards to discourage duplicative, unsupported, or bad-faith claims.
- Recognizing Good-Faith Compliance Efforts: DCUC encouraged FinCEN to consider institutions’ prompt corrective actions, cooperation with regulators, and remediation efforts when evaluating enforcement outcomes, while recognizing the unique operational realities of small and mid-sized credit unions.
