WASHINGTON (12/4/13, UPDATED: 1:45 P.M. ET)--Rose Bartolomucci, president/CEO of privately insured Towpath CU, Akron, Ohio, highlighted how regulatory compliance issues have hampered her credit unions' attempts to serve its 21,000 members at today's House Financial Services subcommittee on financial institutions and consumer credit hearing.
Bartolomucci testified on behalf of her credit union and the Credit Union National Association at the hearing, entitled "Examining Regulatory Relief Proposals for Community Financial Institutions."
Legislators at the hearing agreed there is bipartisan desire to address regulatory issues faced by credit unions and other small financial institutions, with ranking subcommittee member Gregory Meeks (D-N.Y.) noting that small financial institutions are facing severe regulatory problems.
The hearing focused on three bills: A bill to require the National Credit Union Administration and other federal financial regulators to assess and address regulatory duplication or inconsistency; legislation that would allow privately insured credit unions to join a Federal Home Loan Bank (FHLB); and a bill that would adjust the Consumer Financial Protection Bureau's rural designation to align with the definition used by the U.S. Department of Agriculture.
Bartolomucci, who is also a former Ohio state credit union regulator, noted her credit union has 47 employees, with one full time compliance officer and a shared compliance officer that also works with two other credit unions. The cost of compliance can make it more difficult for her credit union to offer new products to members, she said. Compliance costs and regulatory burdens "will take the lives of some of our credit unions," she noted. Some credit unions cannot afford the cost of compliance, and thus seek out strategic mergers, she added.
The credit union CEO also commented on allowing privately insured credit unions to join FHLB. Doing so would not put taxpayers at risk, Bartolomucci said. FHLB members have to fully collateralize their advances, and "how you are insured does not come into play," she added.
One subcommittee member, Rep. Ruben Hinojosa (D-Texas), said it is important to listen to credit unions and other small institutions, because their communities rely on them for access to credit. Smart regulatory relief is an area that is ripe for bipartisan collaboration, he added.
Another subcommittee member, Maxine Waters (D-Calif.), noted the strong support that credit unions enjoy from members of both parties.
Shelley Moore Capito (R-W. Va.), who chairs the subcommittee, noted that reducing regulation does not mean getting rid of all regulation. Moore Capito said she is trying to help create smarter, more forward thinking regulations.
Rep. Sean Duffy (R-Wisc.) said the Wednesday hearing was a good example of members of both parties working together early to get bipartisan bills moving in the right direction. He also said he hopes that credit unions and community banks will be able to focus less on regulators and more on making loans.