Every state League joined with America’s Credit Unions to express shared concerns with the NCUA about a joint proposed rule to implement section 956 of the Dodd-Frank Act.

The proposal would add additional regulations on incentive-based compensation arrangements and require covered financial institutions to disclose information concerning incentive-based compensation arrangements to the appropriate Federal regulator.

The letter from America’s Credit Unions and the state Leagues noted that the joint proposed rule is unnecessary for credit unions due to the absence of risky incentive-based compensation arrangements at credit unions and the more flexible approach that guidance would provide.

The letter argues that:

• The existing regulatory framework is sufficient;
• The proposed risk profiles do not account for credit unions’ unique nature;
• The rule includes broad and burdensome requirements;
• A credit union service organization exemption is appropriate; and
• Regulators should issue flexible guidance rather than rigid rules.

Read the letter here.