April 11, 2013
Credit unions saw a “win” in Congress Wednesday, as legislators invited industry leaders to share details about the regulatory burden.
The House Financial Services Committee’s Financial Institutions and Consumer Credit Subcommittee held a hearing on "Examining Credit Union Regulatory Burdens." Pamela Stephens, President and CEO of Security One FCU in Arlington, Texas, testified on behalf of the Credit Union National Association (CUNA) highlighting an extensive 35 point regulatory relief plan.
Since passage of Dodd Frank and the creation of the Consumer Financial Protection Bureau (CFPB), credit unions have faced an increased regulatory burden. Despite the law’s intent to deal with the “bad actors” that caused the financial meltdown that sent the country into a recession, all financial institutions are being painted with one brush. This is ultimately hurting credit union members.
Major themes of the hearing included credit unions’ need for supplemental capital, overreach by the CFPB, exam discrepancies and member business lending.
The Northwest was represented by Congressman Denny Heck (WA-10) who serves on the subcommittee in his first term in Congress. Congressman Heck asked three pointed questions during the hearing regarding supplemental capital for credit unions, exam inconsistencies and the CFPB’s proposed remittance rule. Specifically, Congressman Heck asked the witnesses if other U.S. cooperatives have access to supplemental forms of capital and why credit unions have been singled out with this limitation. Regarding exams, Rep. Heck shared CUNA’s recent exam survey and data showing that credit unions in the Northwest are cited more often than credit unions in the other four regions. This is in spite of a lack of evidence that Northwest credit unions are less safe and sound, the Congressman noted. Finally, Rep. Heck referenced the CFPB’s recent remittance rule which includes a proposed exemption limit of 100 remittance transfers a year, a number that will price many credit unions out of the market and leave their members without access to this service via their credit union.
During the hearing, California Congressman Gary Miller, Vice Chairman of the committee, announced his plans to introduce a credit union regulatory relief bill and several other members committed to supporting some form of relief.
“This hearing set the stage for congressional action on meaningful regulatory relief during this Congress, and it’s exciting to finally have Northwest representation on this critical committee,” said Jennifer Wagner, NWCUA vice president of legislative advocacy. “Congressman Heck, through his developing relationship with Northwest credit unions, provided strong, regional examples of how the regulatory burden is crippling credit unions from serving their members and asked an excellent question on the issue of supplemental capital. That drew attention to the fact that credit unions are the only cooperative without access.”
Other witnesses at the hearing included Robert Burrow, President and CEO of Bayer Heritage Federal Credit Union in West Virginia, and Mitchell Reiver, General Counsel of Melrose Credit Union in New York.