"NASCUS has made it clear that it believes federal credit unions aren't paying their fair share of (the) NCUA's operating budget, even though
federal charters currently pay 66.4% of the cost, compared to 33.6% for state charters.
It also demonstrates reform is possible, even without a Federal guarantee, by having investors commit to bear risk now, and allows for the liquidation of Fannie and Freddie, ending their
Federal charters and special status, without losing the value of operating assets critical to the mortgage market.
Brian Kennedy, chairman of NCOIL's Communications, Financial Services and Interstate Commerce Committee, said he remains concerned about optional
federal charters, both because the states have done an excellent job in insurance consumer protection, and the potential loss of premium tax revenues.
The task of determining appropriate or optimal standards under
federal charters may appear simple and straightforward.
Even so, it will take a lot more than presidential friendship to end Fannie Mae's and Freddie Mac's dependence on their
federal charters. Even when they are down they are dangerous adversaries when anyone tries to take away their special government status.
Now the issue hinges on the fairness of converting from state to
federal charters, as the federal government, at the urging of the state's bankers, takes a look at the economic and political ramifications of such conversions.
While continuing to affirm its support for state regulation, the National Association of Insurance and Financial Advisors board voted last week to strengthen the association's position on insurance regulatory reform by endorsing optional
federal charters for insurance companies and agencies.
The federal regulator would grant
federal charters to qualified insurers and reinsurers and their agents.
Probably the most comprehensive proposal is by the ABAIA, which would create two new
federal charters, one for insurance companies and the other for insurance agencies.
If the three largest state-chartered credit unions in California were to convert to
federal charters, the state's regulator would lose $1.7 million of its $7.2 million budget, leaving small and midsize state-chartered credit unions to subsidize that loss.
The president has not taken a public position on the issue of optional
federal charters, and he has not indicated whether there will be an insurance component to his reform proposals.
Federal charters also give credit unions greater ability to make business loans for their members.