By Julian Hattem - 12/31/13 01:43 PM EST
Credit unions don’t need new regulations to ensure that they conduct routine stress tests, according to two top trade groups.
Instead, the Credit Union National Association (CUNA) thinks that credit unions already have all the incentive they need to make sure the financial institutions have sound plans.
According to CUNA deputy general counsel Mary Dunn, a rule isn’t necessary to make sure credit unions conduct the tests "since it is in their own best interests, and those of their members, to do so.”
In October, the NCUA proposed a rule that would require federally insured credit unions with more than $10 billion in assets to develop capital plans and conduct yearly stress tests.
The Dodd-Frank Wall Street reform law called for regulations requiring stress tests for banks, but not necessarily credit unions.
"We do not believe that NCUA has sufficiently substantiated the need for a new regulation, given the financial performance of credit unions in general and the largest credit unions that would be covered by the rule in particular," Dunn wrote in Tuesday’s letter.
In a separate letter sent this week, the National Association of Federal Credit Unions (NAFCU), another trade group, said that the rule “would do little to enhance the security” of the federal fund that insures credit union deposits.
“NAFCU is concerned about the potential impact of bifurcating the credit union industry through this rule, and the precedent it would set for future rulemakings,” wrote Carrie Hunt, the senior vice president of government affairs.
Credit union groups have opposed many financial regulations stemming from the Dodd-Frank law. They say that credit unions weren’t to blame for the 2008 financial crisis and shouldn’t have to bear the brunt of new rules.
-- This post was updated at 8:35 a.m. on Jan. 2 with information about the NAFCU letter.