S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, would greatly ease the regulatory burden on credit unions and “inject new life into communities,” Rick Finley, CEO of WJC FCU, Damascus, Va., wrote in an op-ed piece published in The Virginian-Pilot.
Finley noted that rural Virginia is still struggling from Great Recession, 85 of the state’s 133 counties and cities have shed jobs since 2007.
“To prevent risky lending practices from ever again wrecking the economy, Congress passed the Dodd-Frank Act in 2010. Regulators subsequently wrote thousands of pages of rules fleshing out and clarifying the law’s provisions,” Finley wrote. “As leaders from both parties now acknowledge, Dodd-Frank’s central flaw is its indiscriminate treatment of all lenders--including the credit unions and community banks that had virtually nothing to do with the 2008 crisis.”
Dodd-Frank’s regulations cost Virginia’s 140 credit unions $478 million a year--and another $144 million in lost revenue. Not only is that a direct cost borne by Virginia’s 2.6 million credit union member-owners, but it’s also money that can’t be lent out to small businesses looking to hire more workers or families hoping to purchase homes.
S. 2155, championed by Sens. Tim Kaine (D-Va.) and Mark Warner (D.-Va.), would ease this burden, Finley noted.
“For starters, it would exempt small financial institutions that don’t make many mortgages from rules requiring them to disclose all sorts of information on those mortgages,” Finley wrote. “Collecting and reporting that data can be very expensive and time-consuming — and thus raise the cost of credit for consumers.”
S. 2155 would allow credit unions to classify loans made to landlords purchasing one- to four-unit properties as real estate loans, rather than business loans.
Such changes would free up an estimated $4 billion for credit unions to lend to small businesses across the country, Finley noted.
“It’s time for the rest of the Senate to join Kaine and Warner and hold Wall Street accountable without hindering small financial institutions,” Finley wrote.