WASHINGTON (4/11/13)--U.S. House members showed interest in regulatory relief for credit unions, and outlined some of their own plans for credit union action, during a Wednesday hearing in which the Credit Union National Association released a 35-point plan for relieving credit union regulatory burden.
|Security One FCU CEO Pamela Stephens, testifying on CUNA's behalf, described for members of a House Financial Services subcommittee how there seems to be a "treadmill' of regulatory burden. "I'm constantly running, trying to catch up and fear we are not in compliance," she said. Security One is a $55-million-asset credit union in Arlington, Texas. Shown behind Stephens is (left) CUNA Senior Vice President of Legislative Affairs Ryan Donovan and (right) CUNA President CEO Bill Cheney. (CUNA Photo)|
CUNA's comprehensive plan, presented to the subcommittee by its witness, Pamela Stephens, highlights ongoing concerns with the National Credit Union Administration, the Consumer Financial Protection Bureau, and the Financial Accounting Standards Board, among other things. Stephens is CEO of $55-million-in-assets Security One FCU of Arlington, Texas.
Ryan Donovan, CUNA senior vice president of legislative affairs, said the hearing is an indication that lawmakers have heard the need for credit union regulatory relief "and are preparing to put a solution on the table."
The chairman of the House Financial Services financial institutions subcommittee, Rep. Shelley Moore Capito (R-W.Va.), and ranking subcommittee member Rep. Gregory Meeks (D-N.Y.) both noted the importance of credit unions to their communities.
Subcommittee members said they favored streamlining regulations for credit unions and allowing greater credit union investment opportunities, including access to supplemental capital. Lawmakers also asked pointed questions about qualified mortgages and the true costs of regulatory burdens, and commented on the need for increased lending to small business owners during the hearing.
Legislative fixes to some of the burdensome issues facing credit unions were also discussed. For instance:
Rep. Ed Royce (R-Calif.) also discussed the MBL cap, and his bill (H.R. 688) that would increase that cap from 12.25%-of-assets to 27.5%-of-assets. He noted that many of his constituents have turned to credit unions to help them fund their businesses, and said many small businesses are still in dire need of sources of funding.
During the hearing, Stephens likened credit union battles with regulatory burden with being on an endless treadmill. She said she feels her credit union is constantly running, trying to catch up and be in compliance with all the rules. Stephens emphasized that her credit union is trying to reach out to the Hispanic community in her area, but regulatory burden and issues raising capital have made that more difficult.
The Hispanic community in her area makes a great deal of remittance transfers, and Stephens said her credit union is "trying to get into that business."
Stephens addressed a Consumer Financial Protection Bureau proposal to allow a safe harbor exemption from certain requirements of a developing remittance rule. The safe harbor would release remittance providers that transact 100 or fewer remittances per year from disclosure and other requirements. However, Stephens said that such a low threshold "in no way addresses where we need to be."
Credit unions could better serve their members if resources were not drained on compliance issues, she told lawmakers.
To address regulatory burdens, CUNA has developed its 35-point plan, described by Stephens in her testimony. Items suggested in that plan include:
The CUNA regulatory relief document also addresses concerns regarding CFPB, NCUA and Financial Accounting Standards Board projects and their impact on credit unions.
For prepared hearing testimony, a summary of CUNA's regulatory recommendations, and more News Now coverage of the hearing, use the resource links.