The Department of Labor’s (DOL) overtime rule adds to credit union regulatory burden, and has unintended consequences for members, CUNA wrote to several legislators Thursday. CUNA President/CEO Jim Nussle wrote to Reps. Kurt Schrader (D-Ore.), Henry Cuellar (D-Texas), Jim Cooper (D-Tenn.) and Collin Peterson (D-Minn.) to thank them for introducing the Overtime Reform and Enhancement Act (OREA) (H.R. 5813).
The DOL’s overtime rule, finalized in May, raises the threshold to be eligible for overtime pay by more than twice the current rate, moving the cut-off up to $47,476 from the current $23,660. The OREA would create a staggered 3-year implementation for the rule and would eliminate the requirement to automatically update the salary threshold, which the rule requires every 3 years.
“We do not believe the DOL properly weighed the burdens of this rule, against the services credit unions provide to their communities,” Nussle wrote. “Our analysis of the DOL’s overtime rule is that the unintended consequences and additional regulatory burdens placed on credit unions, outweigh the good intentions of the rule. We appreciate that your legislation is a step in the right direction of creating a more practical DOL overtime rule.”
About 35% of all credit unions have no employees making salaries over the DOL’s threshold, and approximately 46% of all credit union CEOs work at credit unions with $20 million or less in total assets. In certain areas, and at credit unions with smaller asset sizes, even CEOs can make below the threshold or approximately $50,000.
Among credit unions with less than $10 million in assets, almost all CEOs make less than $50,000 and among those with $10 to $20 million in assets, roughly half of CEOs make less than $50,000.
Roughly 46% of all credit union CEOs work at credit unions with $20 million or less in total assets.
“As such, there is no questions credit union operations will be impacted by this rule, and the relief provided in OREA would help lessen that impact,” Nussle wrote.