CUNA wrote to the U.S. House Committee on Small Business Thursday, outlining its concerns with the Department of Labor’s overtime rule. The letter was sent for the record of the committee’s Thursday hearing discussing the rule’s effects on small businesses and their employees.
The DOL’s rule, finalized in May, would increase the threshold for overtime pay eligibility by approximately double the previous rate, to $47,476 annually from $23,600 annually.
“This final rule will not only create regulatory burdens for credit unions when a disproportional percentage of employees are swept into the new threshold, but it will also create unintended negative consequences for those it aims to help, as well as credit union members,” CUNA President/CEO Jim Nussle wrote. “Credit unions in rural and underserved areas, as well as small credit unions particularly will face compliance and regulatory burdens as a result of the rule.”
In the letter, Nussle highlighted that regulatory burden has already caused “concerning” attrition rates at credit unions with less than $100 million in assets. The letter also outlines concerns the Small Business Administration had with the rule’s impact on small businesses.
Other, unexpected, consequences of the rule could include credit unions:
“Changes to the size of credit union staff, or hours of operation, would affect credit union members as well… Credit unions that have to limit work hours and training opportunities may also offer fewer products and services,” Nussle wrote. “Limited resources could impede efforts to expand credit union products or service offerings, and inhibit innovation. Credit unions may be forced to spend more of their members’ resources without necessarily adding any additional value to members.”