NASCUS Annual Summit Showcases New Commitment to Cooperation

The NWCUA team joined credit union regulators and stakeholders at the Annual Summit of the National Association of State Credit Union Supervisors (NASCUS).   The Northwest is being well represented at the meeting with strong credit union representation, regulators from all three states, as well as Association and league staff. One of the highlights of the meeting was the signing of a new cooperative agreement between NCUA Board Chair Rodney Hood and NASCUS Chairman John Kohloff. The Cooperative agreement outlines the commitment to maintaining a cooperative relationship, enhancing supervision, and fostering an “environment of innovation” between state and federal regulators. This agreement modernized and reaffirmed the cooperative agreement that NASCUS Chair Linda Jekel signed with NCUA Board Chair JoAnn Johnson more than 20 years ago. 

Lucy Ito, President of NASCUS, gave an outstanding State of the Credit Union System address.  Ito provided attendees with several facts, including outlining the loan to share ratio of state-chartered credit unions as 82% compared to a 69% ratio in federal credit unions. She continued outlining that the regulatory changes that the NCUA has made over the past couple of years has made the Federal Charter far more attractive than in past years. From 2012 – 2015 there were 40 federal to state charter conversions and only 8 state to federal conversions. Since 2015, that trend has reversed with 32 state to federal conversions and 16 federal to state conversions. The main driver for converting from a federal to a state charter appears to be the expanded field of membership that many states offer. On the flip side,  state charter conversions to federal charters appear to be related to a desire to take part in interstate branching and working to avoid multiple sets of laws and regulations.

One interesting thing that was pointed out was the fact that a Nebraska federally-chartered credit union recently converted to an Iowa state charter preferring the flexibility offered by the state charter in Iowa  rather than the one in Nebraska. This highlights the importance of maintaining a competitive state charter, even among individual states, in close proximity.

Lucy shared that 42 of the 43 states have a state charter that includes federal parity.  Five of those states, including two in the Northwest, have parity to both the NCUA and other state acts.  The State of Michigan has “ultra parity,” allowing credit unions to ask for parity to other financial institution charters, not just that of credit unions. One of the final discussion points outlined by Ms. Ito was that the number of bank purchase and assumption agreements by credit unions are on the rise, with 29 acquisitions in the past few years.  The size of those agreements appear to be on the rise as well, with the largest coming this year at $733 Million.

The NASCUS Annual Summit continues until later this week.

Posted in Advocacy on the Move.