Brian Knight isn’t sure that calling his group – the National Association of State Credit Union Supervisors – the “little brother” of the credit union trades is correct.

It’s not that he disputes the size difference between NASCUS and the industry’s largest voice, America’s Credit Unions. And it’s not necessarily that being called a little brother has negative connotations.

Heck, Knight, NASCUS’ President and CEO, has an older brother himself.

No, the real reason Knight balks a bit at the designation is simply because NASCUS is built differently than the other groups that represent the industry.

“All of us are focused on enhancing the credit union system, ensuring that it remains viable, but NASCUS is really focused on achieving those goals by ensuring that policy decisions, whether they’re from the regulatory perspective or what I would call the stakeholder credit union perspective, are informed decisions that are considering the perspectives and responsibilities of all sides,” Knight said.

Tyfone sat down with Knight and Superintendent for the Iowa Division of Credit Unions, Katie Averill, during the week we spent in Washington, D.C. for the Governmental Affairs Conference earlier this month.

Knight in 2022 succeeded Lucy Ito, who retired after leading the association since 2014. He joined NASCUS in 1998 as the group’s general counsel.

And, make no mistake, NASCUS is smaller than some other groups that advocate on behalf of credit unions.

According to Candid, an information hub for nonprofits, NASCUS has assets of slightly less than $7 million. Compare that to the $81 million for America’s Credit Unions.

Even some of the state credit union trade groups are larger than NASCUS. For example, Cornerstone Credit Union League, which represents 600 credit unions in Texas, Arkansas, Kansas, Missouri and Oklahoma, has $36 million of assets.

But for its limited size, NASCUS packs a punch in the credit union space.

“Our focus at NASCUS, from when we were founded in 1965 with the state regulators, has been to help the state regulatory system ensure that it is evolving in line with the credit union system while still maintaining its eye on the safety and soundness, which is the public trust that is put into the regulatory agencies with respect to a depository and institution system,” Knight said.

So maybe it’s appropriate that Iowa, a state with only 66 credit unions, is represented so prominently on the NASCUS board.

Averill, who serves as NASCUS’ chair, said the relationship between the regulator and the regulated for state-chartered credit unions is often personal enough that the credit unions themselves describe it with the term “partnership.”

“It’s a compliment to our agency in that we do work with them on specific questions,” Averill said. “ I always say that there are 66 credit unions in Iowa and 66 different business models. So I think that communication and engagement is one of the top priorities for our agency.”

And that personal touch may be why so many credit unions choose the state charter over the federal charter. At the end of 2024, assets in the credit union system were split almost evenly between the two groups, with federal charters accounting for slightly more total members.

“One of the big advantages that we hear from state chartered credit unions is that in most states you are far closer to your regulator and to policymakers than you are if you’re a federal credit union,” Knight said. “There is real value in most of our states where you are hopping in your car away from going to see your regulator. Going to see policymakers. You can see them on a regular basis.”

So what about the relationship between federally chartered and state charter credit unions and the agencies that oversee them? What’s been the single most positive recent development?

Knight said things are in a good place today and heading to an even better level.

“There’s a lot of dialogue through NASCUS, and we’re seeing that kind of at the macro level, but we’re also seeing that replicated at the state level and a lot of positive dialogue between the state regulators and their credit unions,” Knight said.

Averill agreed and said engagement between the industry and the regulators has been a priority in Iowa. For example, the state holds a “Superintendent’s Day” annually in which the focus is on credit union board members and their education on hot topics.

Averill herself also meets periodically with credit union board chairs to talk about their issues and challenges and the relationship with their regulators.

So where does the most work still need to be done?

Knight said one area of need is in finding a better understanding of the balance between strict regulation, guidance and regulatory discretion.

“But what I would suggest is we need to continue the conversations because I think ultimately the supervisory system is healthier with guidance and with discretion,” he said. “If nothing else, guidance and discretion gives a regulatory agency the flexibility to judge some institutions strictly on their merits – case by case – because while not all people have the same skill sets, not all credit unions are equal.”