Posted On: Jul 16, 2014
Speaking before a House Financial Institutions and Consumer Credit subcommittee hearing on regulatory relief proposals for community financial institutions, Dover FCU’s President and CEO, David Clendaniel, told lawmakers ”enough is enough.”
Stating that “the growing regulatory burden on credit unions is the top challenge facing the industry today,” Clendaniel continued, “the number of credit unions continues to decline, as the compliance requirements in a post Dodd-Frank environment have grown to a tipping point where it is hard for many smaller institutions to survive. Credit unions want to continue to aid in the economic recovery, but are being stymied by over-regulation. Enough is enough.”
Regulatory burdens and proposals are causing immediate threats to credit unions’ ability to serve their members and provide them with services they want. Clendaniel noted that NCUA’s proposed Risk-Based Capital Rule is one example, stating “if the NCUA implements this rule as proposed, credit unions will have less capital to loan to creditworthy borrowers, whether for a mortgage, auto, or business loan.”
Since 2008, more than 180 regulatory changes from at least 15 different federal agencies have affected credit unions. The cost of compliance diverts resources away from member services and is also an overwhelming burden for many credit unions. In addition to increasing the number of full-time compliance personnel, credit unions have also shifted responsibility for compliance-related duties to non-compliance staff members to address the growing regulatory burden.
Proposed legislation to provide regulatory relief include:
As Clendaniel told the members of the subcommittee, “credit unions didn’t cause the financial crisis, they helped blunt the crisis by continuing to lend during difficult times, and perhaps most importantly, continue to play a key role in the still-fragile economic recovery.”