WASHINGTON (10/28/13)--Rep. Michael Michaud (D-Maine) has urged federal regulators to "consider the unintended consequences of a 'one size fits-all' regulatory approach, and to the extent practicable, exempt or alleviate unnecessary burdens on credit unions."
Michaud made his case against regulatory burden on credit unions in letters sent last week to Consumer Financial Protection Bureau Director Richard Cordray and National Credit Union Administration Chairman Debbie Matz.
"Credit unions did not engage in the abuses and risky practices that led to the financial crisis. I am concerned that the implementation of financial reforms is becoming disproportionately burdensome on credit unions, particularly the smaller community-based institutions, and leading to the consolidation of institutions," Michaud wrote.
Regulatory costs are particularly burdensome for smaller institutions, and every dollar a credit union spends on compliance reduces the amount available to serve their members, he said.
The federal lawmaker noted that "credit unions play an important role in states, towns and municipalities across the nation," and said many have deep ties in the communities they serve. "Credit union's local ties have long prevented excessive risk taking, and their structure has allowed them to remain a well-capitalized source of financial stability both during and following the financial crisis," he added.
Michaud encouraged Cordray and Matz to take these factors into account as they regulate, oversee and examine credit unions.
"Examination practices should be consistent from one to the next and should give credit unions the reasonable flexibility to serve their members' needs. Standards and rules developed for the largest and most complex financial institutions do not always make sense for credit unions," he added.
Maine Credit Union League President John Murphy in a release said Michaud "understands the important and significant role of credit unions, and that the burden of over regulation is impacting a credit union's ability to serve their members." The league appreciates "his initiative and advocacy on behalf of credit unions on this important issue," Murphy added.
For the full letter, use the resource link.