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NAFCU Urges Regulatory Relief for All Credit Unions
WASHINGTON, DC – The National Association of Federal Credit Unions (NAFCU) today told Congress that credit unions need broad-based relief from the overwhelming tidal wave of compliance burdens as a result of the Dodd-Frank Act and called for immediate action on the provisions in the association’s comprehensive five-point plan.
“At Bayer Heritage, we have seen our compliance costs double in just the last few years and recently hired a new full-time employee to help with compliance at a cost of over $65,000 a year,” said Robert D. Burrow, president and CEO of Bayer Heritage Federal Credit Union. Burrow testified on behalf of NAFCU before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.
Burrow pointed to a decline in the number of credit unions, which have dropped by more than 700 since 2009, to underscore the impact of the growing compliance burden. When discussing the recommendations in NAFCU’s five-point plan for regulatory relief that was sent to Congress in February, he highlighted provisions seeking statutory and regulatory changes to facilitate more credit union lending to credit unions’ small business members, access to supplemental capital, national standards for data security, and an easing in yearly privacy policy notices.
Toward that end, Burrow urged Congress to move forward on key legislation, including H.R. 719, the Capital Access for Small Businesses and Jobs Act, which would allow credit unions access to supplemental capital and H.R. 688, the Credit Union Small Business Jobs Creation Act, which would raise the arbitrary and outdated credit union member business lending cap. Burrow also recommended Congress take steps to grant the National Credit Union Administration the authority to delay the implementation of a Consumer Financial Protection Bureau (CFPB) rule if compliance with a proposed rule would create an undue hardship for credit unions.
Burrow also noted the need for coordination among the many agencies charged with implementing rules for financial institutions. He pointed to NAFCU’s 2012 letter to then-Treasury Secretary Tim Geithner, urging him to use his position as chairman of the Financial Stability Oversight Council (FSOC) to help facilitate such coordination.
“It is not one single regulation that is creating this burden, rather the tidal wave of new rules and regulations coming from multiple regulators – often with little or no coordination between them. The burden is compounded as old and outdated regulations are not being removed or modernized at the same pace,” he said. “This regulatory tsunami has caused all credit unions to need regulatory relief, and any relief effort should include all credit unions and not attempt to split the industry.”
Bayer Heritage Federal Credit Union, headquartered in Proctor, W.Va., has more than 29,000 members with assets totaling about $300 million in assets and 10 branches in four states, including West Virginia, Pennsylvania, South Carolina and Texas.
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The National Association of Federal Credit Unions is the only national organization that focuses exclusively on federal issues affecting credit unions, representing its members before the federal government and the public.