HARTFORD, Conn. (10/14/15)--Credit unions grapple with burdensome regulations on a daily basis, and the situation is “unsustainable,” Jill Nowacki, president/CEO of the Connecticut Credit Union League, told the Hartford Business Journal this week.
The good news, Nowacki explained, is that the National Credit Union Administration recently approved the Regulatory Flexibility Act, which will allow credit unions with up to $100 million assets to be considered “small,” up from $50 million.
The move will extend relief to more than 700 U.S. credit unions. (See News Now story: Small entity rule to relieve 733 more CUs)
Still, Nowacki said that compliance costs doubled between 2007 and 2012, and helped fuel consolidation within the movement. The broader trend is even more frightening, she said, as the number of credit unions nationwide fell to roughly 6,000 in 2015 from 12,500 in 1995.
The league president said that she would like to see that trend move in the opposite direction, because member-owned credit unions provide affordable services to one out of four consumers in the state.
In the wake of the financial crisis, not one credit union accepted bailout money from the government, she added.
Yet, as Joanne Todd, president/CEO of Northeast Family FCU, Manchester, Conn., explained in the article, credit unions are still paying the price for big bank transgressions.
Credit unions are required to comply with many of the same regulations imposed on the bad-acting big banks, she told the Business Journal.
She also provided hard numbers on how regulations affect her credit union. Despite having fewer than 6,400 members and less than $75 million in assets, Northeast Family spends nearly half of its education budget and roughly 20% of its labor costs on regulatory issues, Todd said.