Regulatory Year in Review

Facing a growing regulatory framework, Northwest credit unions stepped up in 2014 to fight for fair regulations that do not weigh them down with unnecessary burdens.

In the wake of the Dodd Frank legislation, which was supposed to address the problem of banks that were “too big to fail,” when in fact the bill’s implementation has resulted in “too small to succeed,” a regulatory environment in which unnecessary burdens and challenging exam practices have resulted in credit unions consolidating at a pace of nearly one a day.

“Even with all these challenges, credit unions continue to grow,” said John Trull, director of regulatory advocacy for the NWCUA. “They surpassed $1 trillion in total asset size, and Northwest credit unions added nearly 200,000 new memberships this year alone.”

Facing Challenges Head-On

The biggest regulatory challenge of 2014, said Trull, came when the National Credit Union Administration released its proposed rule on risk-based capital (RBC). “The proposal would have had a detrimental impact on the products and services that credit unions provide their members, and would have put them at a competitive disadvantage compared to other financial institutions,” said Trull.

Northwest credit unions came together to let the NCUA know that the RBC proposal was unacceptable as drafted. Nearly a third of all credit unions in the Northwest were inspired to write letters. Advocates took their concerns to members of Congress, spoke up at NCUA listening sessions, and went to NCUA headquarters to meet directly with key decision makers. Ultimately, this vibrant and coordinated effort led the NCUA to promise an improved proposal in early 2015.

“This was a significant lift by the entire credit union movement,” said Trull. “This effort gives us a template that we will be able to use to win future victories.”

Regulatory & Exam Improvements

Though the regulatory environment remains challenging, Northwest credit unions chalked up some encouraging victories this year, including non-disclosure of initial NCUA stress-test results, removal of fines for late-filed call reports, the Washington Department of Financial Institution’s first CEO outreach, new training opportunities and much more.

The regulatory advocacy efforts of Northwest credit unions notched many other 2014 victories as well, including updating the model credit union bylaws for Washington State. “We pulled together an excellent team of legal-minded folks for this process,” said Trull. “The end result is a significantly improved product that will help credit unions streamline their operations and boost efficiency.” The NWCUA will host bylaw workshops over the next year to help credit unions take advantage of the new improvements, which include policies and procedures for expelling a threatening member, improving board and supervisory committee functions, and many other areas of corporate governance. Trull says that Oregon credit unions can expect a similar process in 2015.

Creating Efficiencies

Northwest credit union advocacy efforts also bolstered the efforts of credit unions who serve the underserved. Rogue Credit Union partnered with the NWCUA on a federal grant to provide a new compliance tool to 23 low-income designated credit unions. The $30,000 grant will provide an estimated $90,000 in direct benefit to those credit unions, and give them an immensely improved exam experience.

The Association added a number of new regulatory tools like an RBC resource page, the new exam reporting tool, and an improved regulatory calendar to streamline the flow of information back and forth between the Association and its members.

Trull said that his favorite moment of the year was helping Cutting Edge Credit Union get their low-income designation. They started the application only days before the deadline for a grant only available to low-income credit unions (LICU).

“We were able to expedite the LICU process and get their application through and approved in less than 6 hours,” said Trull, “the NCUA website was updated the next morning, and the grant deadline was that evening. We encouraged them to apply for the grant explaining that these low-dollar grants had a high chance of success, no reporting requirements, and took approximately 10 minutes to apply for. They applied for a $2,500 dollar grant to help them get their community development financial institution (CDFI) certification, won the grant, and recently became CDFI certified. CDFIs are eligible for multi-million dollar grants that will help smaller credit unions serving people of modest means continue to deliver critical products and services to their members.”

The Association has proposed improvements to the NCUA’s low-income credit union regulations that would allow more credit unions to qualify for the designation, and the suggested changes appear to have the NCUA’s support. The NCUA will open the next grant round for LICUs on February 2, 2015.

If you are interested in low-income credit union designation or other regulatory issues, you are encouraged to contact John Trull at or 503.350.2209.

Questions about this story? Contact James Pearson: 206.340.4790,

Posted in Advocacy News, NCUA.