WASHINGTON, DC (January 31, 2017) — National Association of Federally-Insured Credit Unions (NAFCU) President and CEO Dan Berger today issued a statement regarding President Donald Trump’s executive order to reduce regulation and control regulatory costs. The president signed the executive order during a White House meeting of small-business leaders.
“Reducing credit unions’ overwhelming regulatory burden has been and continues to be a top priority for NAFCU,” said Berger. “While NAFCU and our members continue to believe that a big part of the solution to this critical problem is through legislative action, we also support other methods that achieve the much-needed reduction in onerous and costly regulations.”
The current regulatory environment has been choking the credit union industry for years. Since the second quarter of 2010, when the Dodd-Frank Act was implemented, approximately 20 percent of the industry has been lost; an average of one credit union merges or closes every single day. Today, there are only 5,844 federally-insured credit unions.
Credit unions represent a vital source of capital for small businesses. A 2011 study commissioned by the Small Business Administration’s Office of Advocacy found that during the financial crisis from 2007 to 2010, while banks’ small-business lending decreased, credit union business lending increased as a percentage of assets. Today, credit unions continue to help small businesses grow. As of September, credit unions’ outstanding small-business loans rose 14 percent to $60 billion.Unfortunately, this overwhelming regulatory burden has impeded credit unions’ ability to provide more capital to small-business owners.
This latest executive action will prepare a process for the White House to set an annual cap on the cost of new regulations, which, for the rest of fiscal 2017, would be $0. The executive order requires federal agencies and departments “identify” two rules to be eliminated every time a new rule is issued. The goal being “total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero.”
The order does not directly apply to the NCUA or CFPB since they are independent agencies, but they could opt to comply. Also, the executive order makes exceptions for emergencies and national security.
The director of the Office of Management and Budget will provide federal agencies with guidance on this order. Trump has nominated Rep. Mick Mulvaney, R-S.C., to fill that role; his nomination may be considered by the Senate Homeland Security and Governmental Affairs Committee on Wednesday.
The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.
