SEATTLE (8/28/08)--"Capital modernization is essential. The issue of capital reform is the issue of this generation," state regulators were told at the National Association of State Credit Union Supervisors (NASCUS) State System Summit in Seattle last week. Dennis Dollar, principal of Dollar and Associates, told the group, "If we don’t fix this now, I worry about the next generation of credit unions. The capital system for credit unions must be fixed. The time for this issue has come.” Dollar is a former chairman of the National Credit Union Administration (NCUA). The summit, which meet Aug. 21-23, provided a venue for regulators, credit union leaders and dual chartering supporters to discuss challenges and opportunities facing the state credit union system. Other highlights:
* National Credit Union Administration (NCUA) Chairman Michael E. Fryzel made his first speech since taking office at NCUA. His comments about his partnership approach with state regulators were covered in News Now's Aug. 21 (use the resource link). * Cathie Tierney, president of Community First CU, Appleton, Wis., discussed the credit union's unrelated business interest tax (UBIT) litigation, filed in January, against the Internal Revenue Service. A court date has been set for May 2009. “We are very pleased that this process is moving as quickly as it is, and we are optimistic about a positive outcome for state-chartered credit unions,” she said. * Jim Devine, CEO of Hipereon Inc., walked attendees through essential elements of a safe and sound member business lending (MBL) program. Few credit unions have studied their current membership base for existing business owners as a target audience for their MBL programs. “You should help your members build a business that is transferable,” he said, adding that MBL staff must be “business model structure experts” with long-term education. “You can’t pretend in this line of business,” he said. * Gavin Gee, director of the Idaho Department of Finance, discussed the new Nationwide Mortgage Licensing System (NMLS), which he said was essential to providing transparency and oversight of the nation’s mortgage industry. More than 20 states use or will begin using the NMLS this year. Credit union employees who are mortgage originators must register under the Housing and Economic Recovery Act of 2008. "States will have to pass legislation to meet the standards of the new law,” said Gee. A group of state regulators is working on model legislation to streamline implementation and provide uniformity, he said.
NASCUS President/CEO Mary Martha Fortney noted that "open dialogue and discussion between regulators and credit unions on the industry’s critical topics is essential to the longevity and safety and soundness of the credit union system.”