Congress could bolster consumer access and better protect credit unions and members by making legislative changes proposed Tuesday by NCUA Board Chairman J. Mark McWatters. The Senate Committee on Banking, Housing, and Urban Affairs asked the primary banking regulators from the Federal Reserve, OCC, FDIC, and NCUA to testify on their implementation status of S.2155. Notably not included was the Bureau of Consumer Financial Protection which has jurisdiction over several provisions of S.2155
McWatters testified for the NCUA, and his oral and written statements are available on the NCUA’s website. He outlined several steps taken by the Agency to implement regulatory relief for credit unions, while also outlining an agenda of additional steps Congress can take to aide credit unions. Those items included expanding the credit union charter to include unlimited services in undeserved communities and regulation of third party vendors for credit unions including FinTech companies. McWatters further added that this is necessary in the area of cyber-security.
“While the NCUA Board can provide federally insured credit unions with meaningful regulatory relief, Congressional action is required to provide additional flexibility in some areas,” McWatters said. “Congressional action can provide new avenues for growth without sacrificing the safety and soundness of the credit union system.”
Chairman McWatters encouraged lawmakers to make changes to the Federal Credit Union Act to open up access for more underserved households to credit union membership.
For example, the Federal Credit Union Act permits only federal credit unions with multiple common bond charters to add underserved areas to their fields of membership. Allowing all federal credit unions to add underserved areas would give more people access to federally insured financial institutions and would make more credit unions eligible for Community Development Financial Institutions Fund programs.
McWatters’ other recommendations included allowing chartering of web-based communities and permitting credit unions to add people living in a census tract where current projections would indicate they qualify as low-income.