Hauptman announces ‘no regulation by enforcement’ policy
NCUA Chairman Kyle Hauptman issued a statement Wednesday on the agency’s no regulation-by-enforcement policy, one of his stated goals upon being named chairman earlier this year.
According to Hauptman, “no enforcement action should ever set―or even clarify― policy.” While he said the statement isn’t a response to any recent NCUA actions, “it’s counterproductive for a deposit insurer to engage in regulation-by-enforcement against the same institutions we insure.”
America’s Credit Unions has long opposed regulation by enforcement from any federal regulator, and wrote to Hauptman in January urging NCUA to ensure all enforcement and examination activities are grounded in established law and regulation rather than supervisory guidance or best practices.
“America's Credit Unions thanks Chairman Hauptman for his commitment to clear, fair regulation and supervision of the credit union industry,” said America’s Credit Unions President/CEO Jim Nussle. “We have long raised concerns about 'regulation by enforcement' and the uncertainty and burdens that approach adds to credit unions' compliance efforts. Official processes for rulemaking and guidance ensure transparency and well-defined expectations between regulators and covered institutions. We look forward to continuing to work with Chairman Hauptman and the NCUA to bring meaningful regulatory relief to credit unions.”
NCUA’s no regulation-by-enforcement policy statement notes “regulation-by-enforcement is unethical and not permitted at NCUA,” and that:
- Enforcement actions shall only occur in the case of clear and significant violations of law or regulation;
- No enforcement action shall be motivated by trying to boost the agency’s enforcement totals or get the enforcement done in a certain fiscal or calendar year;
- Enforcement is a necessary tool, but is not, by itself, an accomplishment or a metric of success;
- Avoiding double standards is a guiding principle; and
- If NCUA finds a harmful practice that threatens our mission or is otherwise injurious or abusive, and it is not currently addressed by law or regulation, the next step is to consider rulemaking or other remedies.
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