McWatters Touches on Cybersecurity During Senate Hearing

J. “Mark” McWatters, chairman of the National Credit Union Administration (NCUA), testifies before the Senate Banking Committee last week.
J. “Mark” McWatters, chairman of the National Credit Union Administration (NCUA), testifies before the Senate Banking Committee last week.

Last week the Senate Banking Committee asked primary banking regulators from the Federal Reserve, Office of Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and National Credit Union Administration (NCUA) to testify on the implementation status of the Economic Growth, Regulatory Relief, and Consumer Protection Act (Senate Bill 2155).

Notably not included was the Bureau of Consumer Financial Protection (BCFP), which has jurisdiction over several provisions of S. 2155.

NCUA Board Chairman J. “Mark” McWatters outlined several steps taken by the agency to implement regulatory relief for credit unions, while also outlining an agenda of additional steps Congress can take to aid credit unions. Those items included expanding the credit union charter to include unlimited services in underserved communities and regulation of third-party vendors for credit unions, including financial technology companies.

McWatters added that this is necessary in the area of cybersecurity. Pages 11 and 14 – 16 of his testimony mention this topic within the areas of the agency’s Enterprise Solution Modernization Program and the topic of vendor authority (click here to view).

“Technological and other advancements, including credit union relationships with fin-techs and other third-party vendors, are changing the way financial services are provided,” McWatters said. “While these developments can help credit unions meet the needs of all segments of their membership and communities, they also mean that credit unions and the NCUA must evolve to remain effective in the changing financial services landscape.”

Regulators from across the banking spectrum agreed that cybersecurity and data security are among the highest threats to financial institutions, while recognizing payment card breaches continue to be an external threat to financial institutions.

During the hearing, the Community Reinvestment Act (CRA) was also raised—although not specifically targeted to credit unions. Most questions were in regard to recent proposed regulatory changes for banks.

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