Sen. Jeff Merkley (D-Ore.), ranking member of the Senate Banking subcommittee on financial institutions and consumer protection, speaks to credit union witness Carrie Wood, president/CEO of Timberland FCU of DuBois, Pa. (CUNA Photo)

Timberland FCU CEO tells real-life tale of reg. burden to senators

October 29, 2015

WASHINGTON (10/29/15)--Like all credit unions, Timberland FCU of DuBois, Pa., has a tradition of going above and beyond to serve its members, but it’s getting harder due to regulatory burden, President/CEO Carrie Wood said Wednesday.

Wood testified before the U.S. Senate Banking subcommittee on financial institutions and consumer protection during a hearing on the effects of regulatory burdens on rural financial institutions.

“While my title is CEO, I am also the security administrator, HR department, compliance officer, marketing department, backup IT person and [Nationwide Multistate Licensing System and Registry] administrator," Wood said. "To keep up with the changes coming out of Washington, I have assigned a team of five staff--a full third of my total--from various departments across the credit union.

“When this team is working on compliance issues, they are not serving our members. They’re not helping them get loans. They’re not providing financial counseling. They’re not helping improve our services.”

CUNA and the Pennsylvania Credit Union Association helped prep Wood before the hearing, meeting with her all day Tuesday to go over testimony at CUNA’s Washington, D.C., office.

Wood told the legislators that the burdens have kept Timberland from entering new markets and offering new products.

“Our members want us to offer small business loans, but we are hesitant because of the regulatory and statutory restrictions in place today,” she said. “We’ve also delayed our entry into indirect auto lending for similar reasons.”

She added that every time a new rule is added or changed, the credit union and its members incur costs. Time and money is spent on analyzing the new requirement, modifying computer systems, updating internal processes, training staff and producing materials to help members understand the new requirement.


Click image to enlarge. From left, Carrie Wood, president/CEO of Timberland FCU, DuBois, Pa.; Robert Henson, CUNA senior director of advocacy; and Sen. Sherrod Brown (D-Ohio), ranking member of the Senate Banking Committee. Wood testified before a Senate subcommittee on regulatory burdens facing rural institutions. (CUNA Photo)

“Rules are often changed in the name of consumer protection, but when regulators make it harder or more expensive for me to serve my members, that’s not consumer protection,” Wood said.

She cited the Consumer Financial Protection Bureau’s Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures (TRID) rule as the latest example.

“We have known TRID was coming down the pipe for some time, and we worked hard to prepare. TRID is a complicated rule, and the CFPB provided us absolutely no transition time," Wood said. "One day we had to do things one way; the next day, something completely different. No transition period. No enforcement delay. No legal protections.

“As a small institution, we ran into an unanticipated problem after we flipped the switch, so we were forced to manually input information, slowing down the process for our members and potentially exposing us to errors.”

Wood outlined a number of things Timberland does for its members that don’t make money, but are essential services. A short-term, small dollar loan for a member to afford lice treatments for his five granddaughters, payday alternative lending and free credit counseling are some examples she gave the subcommittee.

“My members need our credit union to be in a position to help them in these situations,” she said. “Unfortunately, every new rule makes it much more difficult for us to be there when they need us.”

CUNA submitted a letter for the record of the hearing Tuesday, outlining a number of steps Congress, and the Senate specifically, can take to help ease the burdens on credit unions and other small financial institutions.