PEWAUKEE, Wis. (5/15/15)--Wisconsin credit unions emphasized their difference as locally owned, cooperative financial institutions in a roundtable meeting Wednesday with Elizabeth Ellis, Consumer Financial Protection Bureau (CFPB) deputy assistant director office of financial institutions and business liaison.
The Wisconsin Credit Union League coordinated this unique meeting held at the West Allis, Wis., branch of Empower CU. State credit unions took the opportunity to tell Ellis they were not responsible for the fallout that resulted from the financial crisis, yet they have been hit with a wave of regulations that endangers the close relationships they hold with their members.
All the participants urged the CFPB to recognize that credit unions provide all the products and services they do because of who they are: member-directed financial cooperatives.
Across the board, credit unions offer products to help members improve their financial standing, such as small dollar loans. “Our small loans help credit scores go up, to help members improve themselves--just opposite of the bad actors,” said Troy Perlberg, chief operating officer, Southern Lakes CU, Kenosha.
Credit unions shared scenarios about the significant investments they made in compliance requirements, including form purchases and investments in core processing systems. “The cost of regulation comes out of our return to the member,” said Steve Nothem, president/CEO, Premier Financial CU, New Holstein.
Sara Steichen, president, Oshkosh Truck CU, said her credit union doesn’t charge for closing costs or document preparation on most mortgage loans, but the forms required have become onerous. She cited an example in which 67 separate forms were needed for two loan functions. Those forms are expensive to acquire and time-consuming to complete, she said.
“Any revenue source you take away through rule-making squeezes our margins even more,” she said.
Andrea Stritzke, CUNA Mutual Group's director of lending compliance, joined the credit union advocates at the roundtable and emphasized that form changes present daunting processing challenges for credit unions.
Ellis pointed out that the input that the CFPB hears in special sessions, such as the one held Wednesday, is extremely valuable, and the stories and data are used in meetings with other CFPB staff and policymakers on the Hill. She encouraged credit unions to continue to share details about specific programs as part of their dialogue with regulators to amplify their voice and influence how regulations are shaped.