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| Calling for Credit Union parity in Deposit Insurance Reforms |
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As the House Financial Services Committee continues discussions about deposit insurance reform, America’s Credit Unions offered the credit union perspective on four bills introduced by members of the committee this week. While America’s Credit Unions has not sought increases in coverage limits for the National Credit Union Share Insurance Fund (NCUSIF) at this time, any changes in coverage for the Federal Deposit Insurance Corporation must provide parity for the NCUA.
“We are grateful for Congressman Andy Barr’s leadership in introducing a bill that would create a permanent Transaction Account Guarantee program that includes credit unions," said President/CEO Scott Simpson in response to the introduction. "Deposit protection gives people the peace of mind that boosts consumer confidence, helps keep the economy stable, and ensures institutions can effectively serve their members and communities even when things get tough. We appreciate that credit unions are included in this legislation and recognized as important parts of this framework. We look forward to working with Congress to move this important policy forward.”
Another bill is the “Main Street Depositor Protection Act,” which provides parity for credit unions in the updates to the deposit insurance network. However, there is concern with language that could undermine the independence of the NCUA by giving the FDIC the authority to set share insurance coverage levels for certain accounts.
America's Credit Unions' letter thanks Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity Chairman Frank Lucas, R-Okla., for his leadership on this topic but urges the committee to make needed changes to incorporate the NCUA's authority into the bill.
“Strengthening depositor confidence is critical to maintaining a stable and competitive financial system. We appreciate Congressman Lucas’ focus on modernizing deposit insurance for today’s economy. However, there are some aspects of the ‘Main Street Depositor Protection Act’ that give us pause," Simpson said.
“As Congress considers updates to the deposit insurance framework, it is essential to fully include and provide parity for credit unions while recognizing their distinct structure and mission. Policymakers must ensure legislation includes autonomy and oversight by the NCUA as credit unions’ independent regulator, just as the FDIC provides oversight of banks."
America’s Credit Unions also offered support for the “Growing Deposit Insurance for the Future Act,” introduced by Dan Meuser, R-Pa., as well as legislation introduced by Marlin Stutzman, R-Ind., to require the FDIC and NCUA to carry out an analysis to determine whether insurance coverage should be raised on covered transaction accounts.
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