CU relief priorities highlighted for Senate panel study
April 16, 2015
WASHINGTON (4/17/15)--In response to a Senate panel's effort to review the effects of federal regulations, CUNA submitted a letter to leadership of the U.S. Senate Committee on Homeland Security and Governmental Affairs Thursday.
Sens. Ron Johnson (R-Wis.), James Lankford (R-Okla.), Thomas Carper (D-Del.) and Heidi Heitkamp (D-N.D.) announced March 18 that the committee is seeking input from those directly impacted by federal regulations of all kinds.
CUNA President/CEO Jim Nussle pointed out in CUNA's letter that regulations facing credit unions are "ever increasing, never decreasing," and cited regulatory burden as a key driver to consolidation within the credit union system.
"Credit union volunteers and executives are particularly frustrated that they are required to comply with these new and complex regulations notwithstanding the fact that they did not cause or contribute to the financial crisis," Nussle wrote. "To the extent that post-financial crisis regulations result in credit unions offering fewer services to their members or services which are more expensive, we believe the regulations have failed consumers, and add insult to injury."
CUNA highlighted more than a dozen suggested regulatory reforms, including:
Improvements to the National Credit Union Administration and Consumer Financial Protection Bureau rulemaking processes, which would include a required cost-benefit analysis of all proposals;
Amendments to the CFPB's mortgage servicing rules, such as increasing the small servicer threshold to 10,000 loans per year, up from 5,000. CUNA also believes the bureau should limit new regulatory requirements with its prepaid accounts and remittance transfers proposals;
Exempting credit unions from the Department of Defense's Military Lending Act proposal, Financial Accounting Standards Board credit impairment proposal and Internal Revenue Service's Foreign Account Tax Compliance Act proposal;
Improvements to the NCUA's Central Liquidity Facility (CLF) to eliminate the requirement it be funded by stock subscriptions paid for by member credit unions, and allowing credit unions to obtain CLF loans for short-term and longer-term liquidity purposes; and
Suggesting the NCUA work with the Treasury's Financial Crimes Enforcement Network and other regulators to exempt credit unions from "seemingly endless changes" to Bank Secrecy Act and anti-money laundering requirements;
The letter also addressed issues with the NCUA's revised risk-based capital proposal (RBC2), as well as other ways the NCUA can work with other regulators to clarify each regulator's authority over the Federal Trade Commission Act and its implementing regulations.
"This list just scratches the surface of the regulatory burden facing credit unions, but it represents a good place to start in addressing these burdens," Nussle wrote.