NCUA Vice Chairman Discusses Regulations, Cybersecurity, Risk-Based Capital
WASHINGTON (March 9, 2015) – Whether the issue is regulatory modernization, security breaches or legislation, everyone in the credit union community can contribute to positive change, National Credit Union Administration Board Vice Chairman Rick Metsger said today.
“All of us have a role,” Metsger said. “The financial services world is continuously evolving. Both you as service providers and we as regulators and insurers need to keep pace with the needs of American consumers. Concentrate on the things you can change. Help us design the best policy for America’s credit unions and your members.”
Metsger spoke to the annual Governmental Affairs Conference hosted by the Credit Union National Association. The text of Vice Chairman Metsger’s prepared remarks is available here.
Metsger touched on several issues during his remarks, including plans to modernize regulations covering field of membership, fixed assets and member business lending; the importance of cybersecurity; and the agency’s proposed risk-based capital rule.
Discussing changes in field-of-membership rules, the Vice Chairman noted some states have been more progressive than the federal government in adapting to a changing marketplace, and he encouraged credit unions to become engaged in driving change.
“The biggest single issue where you can make a difference is to add your voice to my effort to modernize field-of-membership rules for federal charters,” Metsger said. “Modernizing field-of-membership regulations and statutes may be the most valuable issue for your credit union’s future—more so than any other effort in which you can focus your advocacy efforts. We can, and must, make progress in this area. I welcome input from the credit union community on how we should move forward.”
On the issue of NCUA’s fixed-assets rule, Metsger said he hopes the agency will complete work in the coming months to remove the current 5-percent limit on fixed assets and give credit unions decision-making power on facilities and technology purchases.
“We need to turn operational decisions that do not have an impact on safety and soundness over to you as directors and executive management,” Metsger said. “That’s where those business decisions belong.”
Addressing member business lending, Metsger said he supports both regulatory and legislative change to make it possible for credit unions to better meet the needs of small businesses in their communities.
Metsger described cybersecurity breaches as a problem that “has reached epidemic proportions.” He said NCUA and credit unions must remain vigilant to threats. He also said retailers, not credit unions, should bear the responsibility and the cost when breaches occur at their locations.
Speaking to the agency’s proposed rule on risk-based capital, Metsger called on credit unions to participate in the review-and-comment process.
“Our current risk-based capital system is broken and has to be fixed,” Metsger said. “It fails to identify capital-constrained credit unions until it is too late to save them, so we need to adopt a new system. As we finalize that system, I encourage you to help us design the best policy for America’s credit unions and your members.”
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 United States, NCUA operates and manages the National Credit Union Share
Insurance Fund, insuring the deposits of account holders in all federal credit unions and the overwhelming majority of
state-chartered credit unions. At MyCreditUnion.gov, NCUA also educates the public on consumer protection and financial literacy issues.