Statement Of David M. Marquis
Executive Director
National Credit Union Administration
Before The House Financial Services Subcommittee On
Financial Institutions And Consumer Credit
Hearing On H.R. 3461, The Finanical Institutions
Examination Fairness And Reform Act
Wednesday, February 1, 2012
I. Introduction
Chairman Capito, Ranking Member Maloney, and Members of the Subcommittee, the National Credit Union Administration (NCUA) appreciates the invitation to offer our views on H.R. 3461, the Financial Institutions Examination Fairness and Reform Act.
Introduced by Chairman Capito and Ranking Member Maloney, H.R. 3461 seeks to improve the examination process for depository institutions by, among other things, making available to financial institutions the information used to make examination decisions and codifying certain examination policy guidance. The bill also would create an ombudsman at the Federal Financial Institution Examination Council (FFIEC) to which financial institutions could raise concerns with respect to their examinations. Additionally, H.R. 3461 would establish an appeals process before independent administrative law judges overseen by the FFIEC ombudsman.
In the invitation to testify, the Subcommittee has asked NCUA to comment on the need for reforming the examination appeals process. The invitation also requests NCUA’s views on whether H.R. 3461 appropriately and effectively reforms the examination appeals process. Finally, the Subcommittee has inquired about the need to amend the legislation to better achieve the bill’s objectives.
In difficult economic times, depository institutions will encounter additional stresses. As a result of these pressures, safety and soundness problems will increase, and financial services regulators, including NCUA, will take prompt action to address the identified issues and mitigate emerging risks. NCUA takes these actions in order to maintain the safety and soundness of credit unions, safeguard the National Credit Union Share Insurance Fund (NCUSIF) from losses, protect consumer deposits, and endeavor to assure that taxpayers not experience a loss.
When regulatory actions increase, complaints against the regulator typically rise. NCUA believes that credit unions should have an effective appeals system that works to resolve legitimate concerns and protect against reprisals. NCUA also works to minimize complaints by comprehensively training our examiners and encouraging stakeholders to communicate with us before, during, and after an examination.
This written testimony will provide general background about NCUA and NCUA’s existing examination process. It will also highlight the strengths of NCUA’s current appeals process, which we believe respects credit unions, and brings fairness to our actions and determinations...
NCUA is the independent federal agency created by
the U.S. Congress to regulate, charter and supervise
federal credit unions. With the backing of the full
faith and credit of the U.S. Government, NCUA
operates and manages the National Credit Union Share
Insurance Fund, insuring the deposits of more than 94
million account holders in all federal credit
unions and the overwhelming majority of
state-chartered credit unions.