When it comes to regulatory relief, credit unions deliver substance with the rhetoric.
►Exhibit A: A report to Congress detailing 36 statutory changes (complete with citations to the law) and proposed congressional studies for achieving regulatory relief for credit unions;
►Exhibit B: Testimony before Congress outlining the “crisis of creeping complexity” that the regulatory burden places on credit unions.
►Exhibit C: Action in the House Financial Institutions Subcommittee as it draft s a regulatory relief legislative package for credit unions and other financials.
These examples show the absolute commitment of CUNA, the leagues, and credit unions to secure real, substantial regulatory relief.
We delivered the report to Congress in March as a prelude to the subcommittee’s work on a regulatory relief package. We knew the subcommittee needed details, not just broad strokes about relief provisions. So we went to the leagues and our policy-making committees for their best insights. And then we gave the subcommittee what it was looking for. Among the provisions:
►Thirteen changes giving credit unions and NCUA more flexibility in regulating and serving members;
►Seven suggestions to help credit unions better serve small businesses;
►Five proposals, including our highly important changes to the Federal Credit Union Act: permitting credit unions to accept supplemental forms of capital, and increasing the cap on member business lending; and
►Four recommendations providing relief not only to credit unions but, in some cases, small banks.
And we asked Congress to conduct seven different studies about the impact of credit unions’ regulatory burden. They include:
►Directing the Government Accountability Office to study NCUA’s use of authority to deviate from generally accepted accounting principles;
►Instructing the Treasury Department to study the credit union exam appeals process; and
►Studying the cost-benefit analysis of rulemakings that affect the “cumulative regulatory burden facing credit unions and small banks.”
Next, our testimony last month in the hearing featured, for the first time, a panel entirely of credit union witnesses, no bankers—something else we worked closely on with the subcommittee.
Our witness was Pamela Stephens, president/CEO of $55 million asset Security One Federal Credit Union, Arlington, Texas. She covered our 36 proposals, and pointed out that complying with the ever-increasing regulatory burden hits small credit unions disproportionately harder than larger institutions.
She also made clear credit unions’ frustrations being forced to pay for the sins of others who caused the financial crisis—even though credit unions didn’t engage in any of those activities and don’t abuse members.
“Yet, in most cases, Consumer Financial Protection Bureau [CFPB] rules apply to credit unions just as they apply to the largest institutions, despite the fact Congress conveyed broad authority for the CFPB to exempt credit unions and other classes of providers,” Stephens told the subcommittee , supporting CUNA’s view CFPB should, in fact, use its exemption authority more broadly for credit unions.
She expressed concern about NCUA’s tendency to inappropriately exercise regulatory authority over state-chartered credit unions and the expansion of the agency’s budget at a time when other regulators have reduced their budgets.
She added two key points:
1. Congress should continue to monitor the impact of debit interchange regulation on small issuers, including credit unions; and,
2. It should ensure housing finance reform legislation addresses the concerns of community-based financial institutions, including access to a functioning, well-regulated secondary mortgage market so they can provide access to credit on terms members expect and demand.
What’s especially gratifying about these efforts is they seize lawmakers’ attention. Congress is working on regulatory relief legislation, and it will hear credit unions’ voices and concerns during that process.
Talk in Washington comes with the territory. Substance and action, with the talk, are less frequent.
But not for credit unions, the leagues, and CUNA: We deliver substance with the rhetoric.
BILL CHENEY is CUNA’s president/CEO.