Magazine article American Banker

Treasury Official Sees Credit Unions Unaffected by Merger of Regulators

Magazine article American Banker

Treasury Official Sees Credit Unions Unaffected by Merger of Regulators

Article excerpt

WASHINGTON -- Treasury Under Secretary Frank Newman told an audience of credit union executives Monday that their institutions are already efficiently regulated and should not be affected by legislation to merge the bank regulatory agencies.

The National Credit Union Administration is "explicitly not touched" in the Clinton proposal, Mr. Newman said at a conference sponsored by the Credit Union National Association, because there is little confusion about regulatory overlap in that industry.

"There's no question about who's responsible," he said. "There's no question about where to turn. There aren't multiple regulators tripping over each other and perhaps letting things fall through the cracks."

Banks Are Adamant

While members of the credit union industry applauded Mr. Newman's comments Monday, banking groups have repeatedly demanded that credit unions be included in the administration's regulatory consolidation proposal.

Recently, the American Bankers Association and the Bankers Roundtable told both the administration and the Fed that they would not support a plan that did not include regulation of credit unions in the consolidation.

That issue is just a small one in a sea of big questions that the industry, regulators, and members of Congress have yet to agree on. Today the action moves to Capitol Hill, where the Senate Banking Committee holds the first of four hearings on the issue.

Sparring Continues

But the upcoming hearings have not dampened sparring between the administration and the Fed, which continued Monday. In his address, Mr. Newman displayed a chart produced by the New York Fed that lays out how banks are regulated, noting its complexity.

"It took the Federal Reserve four colors, 12 columns, 17 lines, and 31 footnotes to explain this to the public," he said. …

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