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News Now

Washington
Reforms may add NCUA to oversight council cement NCUSIF level
WASHINGTON (6/17/10--As credit unions await further action on interchange legislation, there have been a number of other developments related to the bicameral discussion of financial regulatory reform. One such development was the Tuesday approval of language that would permanently increase the share insurance limit of the National Credit Union Administration’s (NCUA) National Credit Union Share Insurance Fund (NCUSIF) to $250,000. The conference committee on Wednesday also began discussion of legislative language that would require financial institutions with over $1 billion in assets to disclose compensation structures that include any incentive based elements. That legislative language would also require federal financial regulators to eliminate seemingly inappropriate or imprudently risky compensation practices as part of solvency regulation. Conferees will also discuss including the NCUA in the potential Financial Stability Oversight Council later today, and the Credit Union National Association (CUNA) expects this proposal, which will be made by the House members of the committee, to be added to the final regulatory reform bill. While CUNA supports making the NCUSIF limit permanent, CUNA has opposed the proposed compensation disclosure measures. CUNA has urged legislators to oppose the compensation disclosure measures via a letter to conferees Rep. Barney Frank (D-Mass.), Rep. Spencer Bachus (R-Ala.), Sen. Chris Dodd (D-Conn.) and Sen. Richard Shelby (R-Ala.). CUNA President/CEO Dan Mica said that while he understands the concerns regarding the effect that compensation structures that encourage excessive risk-taking “have on the safety of financial institutions and the economy,” the current proposal unnecessarily covers credit unions and would create an unnecessary regulatory burden. Mica noted that credit unions, which have an average chief executive salary of $93,000, “neither caused the economic crisis nor engaged in the type of compensation arrangements that this language seeks to address.” “Therefore, we urge the Conference Committee to reject either the House Offer or amend it to exclude credit unions from its scope,” Mica added. For the full letter, use the resource link.


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