WASHINGTON (8/9/12)--A provision backed by the Credit Union National Association (CUNA) reinforcing support for a dual chartering system is a key provision of the Banking and Financial Services Policy Directive that the National Conference of State Legislatures (NCSL) is scheduled to adopt this week at its annual meeting in Chicago.
"NCSL believes that state credit union supervisors have the primary responsibility for assuring the safety and soundness of credit unions chartered by and operating under state law and regulation NCSL supports the authority of state governments to determine how state financial institutions must be insured and opposes any efforts by the federal government to preempt states' authority to govern state deposit insurance requirements,'' according to the policy statement, which is the result of a condensation and combination of existing policies.
The conference said it feels the need to take a strong stance because it is "concerned that Congress, the federal banking regulators, and the federal courts have sought to nationalize control of financial services in Washington, D.C."
The statement goes on to say that states must "provide a credible regulatory environment,'' so credit unions avoid practices that can threaten the National Credit Union Share Insurance Fund's (NCUSIF) financial solvency. It added that the National Credit Union Administration has a "legitimate role'' if state agencies don't do their job properly, but the federal agency's "regulations and policies should be crafted in a way that minimizes the preemption of state authority."
CUNA, which is sponsoring a booth at this week's NCSL convention, opposes any unnecessary restrictions on conversion from one system of credit union supervision to another. It favors having the NCUA and state supervisory authorities act cooperatively.