CUNA Regulatory Comment Call

November 7, 2007

Treasury Seeks Comments on Restructuring of the Regulation of Financial Services


The Treasury Department is seeking comments through November 21, 2007 on the regulatory structure of financial institutions in this country and whether changes are needed to improve regulation of those entities. The request follows a Government Accountability Office study released last month that examines federal financial institution oversight and recommends consolidation of the regulators.

Comprehensive restructuring would require statutory changes, which are not going to be made this year for a variety of reasons. Also, we are not aware that this is an upcoming issue next year or beyond for either chair of the financial services committees in the House and Senate. In light of this, it is very unclear when, if ever, restructuring of financial services regulation will occur.

Nonetheless, the GAO study was required by Congress, and any time the government reviews regulatory consolidation there is reason for concern. Also, while credit unions are not a specific target of the review, there is no doubt that the banker groups will seize the opportunity to denounce the tax exempt status and the need for a separate credit union regulatory agency. In light of this, it is important that CUNA be involved in the comment process with Treasury to ensure policymakers are provided thorough analysis and support for continuation of a separate federal regulator as well as insurer for credit unions.

Please submit your comments to CUNA by November 19, 2007.Treasury’s request for comments may be accessed here and the GAO report here. If you have questions about this request, please contact CUNA's SVP and Deputy General Counsel Mary Dunn at

Highlights of Treasury’s Request for Comments

According to the request, Treasury is embarking on a broad review of the regulatory structure of financial institutions. The request is short and provides few insights into the agency’s process; the questions from the Treasury document are listed below. First, however, a recent speech by Treasury Assistant Secretary for Financial Institutions David Nason, provides a few more details of this initiative:

With this brief background, here are the issues Treasury is raising regarding financial institutions in its request for comments:

I. General Issues

II. Specific Issues for Depository Institutions

Brief Summary of the GAO Report’s Recommendations

As part of the 2006 Financial Services Regulatory Relief Act, Congress directed the Governmental Accountability Office to study and review the efficiency of consolidating the financial regulators as well as charter simplification and homogenization of the industry. The GAO issued its report in October and made the following recommendations, which were included in earlier reports from GAO on this topic:

The report also provided several goals that should be achieved in regulatory restructuring:

Eric Richard • General Counsel • (202) 508-6742 •
Mary Mitchell Dunn • SVP & Deputy General Counsel • (202) 508-6736 •
Jeffrey Bloch • Assistant General Counsel • (202) 508-6732 •
Lilly Thomas • Assistant General Counsel • (202) 508-6733 •
Catherine Orr • Senior Regulatory Counsel • (202) 508-6743 •