Association Testified at Parity Hearing on behalf of Mass. Credit Unions
The Massachusetts Division of Banks and Loan Agencies held a public hearing yesterday on proposed amendments to 209 CMR 50:00: Parity with Federal Credit Unions.
The Association was present at the hearing to testify on the proposed changes to the parity regulation. The parity regulation implements M.G.L. c. 171, s. 6A, the section of law which authorizes the Commissioner of Banks to promulgate regulations to grant state-chartered credit unions certain expanded powers in parity with federally-chartered credit unions.
The Association’s oral testimony noted credit union support for the various streamlining changes contained in the proposed amendments, which restructure procedural requirements and reduce administrative processes. Such changes will prove beneficial to member credit unions. In particular, the Association strongly supports proposed provisions which move certain activities which currently require advance regulatory approval by means of an application and/or notice standard, to no longer requiring notice, application, or pre-approval, noting that such efforts reduce regulatory burden on credit unions.
The primary thrust of the proposed amendments relate to reorganization and amendment of the Incidental Powers authorities section, which are proposed to be restored to a single section, proposed 209 CMR 50.09. There are two new authorities proposed under Incidental Powers. The Association testified to its support of these authorities, which provide an expedited review process for certain incidental powers deemed approved by the National Credit Union Administration and which are reasonably related to an incidental power already contained within the parity regulation, and pre-approval provisions for an NCUA-approved power that is not contained within the state regulation.
While such provisions are a welcomed addition, it is the position of the Association that the parity regulation could be improved and clarified with the inclusion of the federal “incidental powers” criteria for review. The federal three-pronged incidental powers test would provide expanded opportunities for state-chartered credit unions to mirror authorities of their federal counterparts, and to increase tools for diversification and minimize risk, ultimately strengthening safety and soundness and improving service to consumers/constituents.
Other financial services industry representatives were present to testify before the Division, stating their opposition to the proposal and position that the issue of incidental powers belongs in the hands of the legislature.
The Association will follow up its testimony yesterday with comprehensive written comments to the Division. Written comments may be submitted to the Division of Banks, 1000 Washington St., 10th Floor, Boston, MA 02118-6400 or at email@example.com until 5:00 p.m. on September 21, 2018.
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