Credit unions serve a vital role in their communities, CUNA board member Dallas Bergl told members of the Senate Banking Committee Thursday, but a one-size-fits-all regulatory climate threatens this relationship. Bergl, CEO of INVOA FCU, Elkhart, Ind., testified on behalf of CUNA for a hearing on ways community financial institutions can foster economic growth.
“Credit unions have expressed concern over new regulations on mortgages, remittances and other financial products. We have repeatedly asked for tailored regulations that allow credit unions to responsibly serve their members and protect consumers from bad practices elsewhere in the industry,” Bergl said. “Contrary to what some have said, opposing one-size-fits-all regulation is not caving in to Wall Street. Rather, it is untying the hands of credit unions and small banks to allow us to better serve our communities.
“In truth, the current regulatory scheme only serves to benefit the largest banks and predatory lenders that have the resources to game the system. This should not be the way the world works,” he added.
Members of the committee had a number of specific questions about regulations preventing credit unions from better serving their members.
Sen. Joe Donnelly (D-Ind.) mentioned the letter signed by nearly 70 Senators last July, urging the Consumer Financial Protection Bureau (CFPB) to utilize its exemption authority under section 1022 of Dodd-Frank.
“The fact that 70 senators agreed to sign speaks to the widespread support here of common-sense regulatory relief,” Donnelly said.
Senators also asked questions about the costs of compliance, the effects of mortgage disclosure and qualified mortgage rules, the burdens of Home Mortgage Disclosure Act compliance and the rate of consolidation of credit unions.
Sen. Mike Crapo (R-Idaho), chair of the committee, said the Senate Banking Committee plans to tackle housing finance reform soon.
“Housing finance reform is a top priority of this committee, and the role of small lenders is important,” he said. “I’d like to ask the organizations here to commit to work with us and with each other as we examine how small lender access to the secondary market can be achieved.”
Additional coverage of the hearing can be found on CUNA’s Removing Barriers Blog.