WASHINGTON (9/18/15)--The Dodd-Frank Act and its effects were the subject of two hearings on Capitol Hill Thursday, each examining the growing regulatory burden that has come since the act was passed into law.
The U.S. House Small Business subcommittee on economic growth, tax and capital access hearing, titled “Financing Main Street: How Dodd-Frank is Crippling Small Lenders and Access to Capital” explored the increased regulatory burden faced by small financial institutions such as credit unions.
Rep. Judy Chu (D-Calif.), the subcommittee’s ranking member, praised credit unions during her remarks for being on the “front line” of local lending, and said she believes credit unions should not be facing increased regulations due to problems they didn’t cause. Chu also re-iterated that credit unions are a significant source of small business capital.
Witness Scott Eagerton, president/CEO of Dixies FCU of Darlington, S.C., gave examples of the burdens facing credit unions, including compliance costs at his credit union that he says have grown “five-fold” since the passage of Dodd-Frank.
These costs hamper Dixies’ ability to invest in marketing and technology, as well as ways to better serve its members. Eagerton suggested that the Consumer Financial Protection Bureau use its exemption authority under Section 1022 of Dodd-Frank to exempt credit unions from many of its rulemakings, a position CUNA has brought to Congress numerous times in recent years.
He also cited the National Credit Union Administration’s 12-month examination cycle and its risk-based capital proposal as examples of additional burdens.
The House Financial Services Committee, in a hearing titled “The Dodd-Frank Act Five Year Later: Are We More Free?” examined effects of Dodd-Frank as well.
During the hearing, Rep. Brad Sherman (D-Calif.), lauded credit union member business lending for providing much needed capital to small businesses as banks are retracting from local lending.
Sherman also gave his support to efforts to raise the statutory cap on member business lending.