CUNA delivers reg. burden study to overregulation hearing
CUNA submitted its comprehensive regulatory burden study to the House Small Business subcommittee on economic growth, tax and capital access for the record of a hearing Thursday. The hearing focused on the impact of overregulation on community financial institutions, which CUNA’s study breaks down to a dollar amount.
“The study found that the costs credit unions bear as a result of regulation, even with conservative measures, are extremely high and have increased substantially since the financial crisis and Great Recession,” wrote CUNA President/CEO Jim Nussle. “The cost of regulatory burden to credit unions in 2014 is conservatively estimated to be $7.2 billion ($6.1 billion in regulatory costs, and $1.1 billion in lost revenue). The $6.1 billion in costs represents 17% of operating expenses of the entire credit union system.”
CUNA, with the support of state credit union leagues, commissioned Cornerstone Advisors to analyze the effect of the more than 200 regulatory changes that have followed the financial crisis. Cornerstone conducted an in-depth examination and quantification of the impact of regulations at credit unions of all sizes.
“The burden is particularly significant for smaller credit unions since larger credit unions are able to spread compliance costs over a larger asset base. Smaller credit unions are devoting almost half of their staff time to dealing with regulations, taking time away from their members and impeding their ability to expand services and products offered,” Nussle wrote. “When small credit unions stop offering products and services, this limits the choices consumers have, which can be particularly problematic in rural and underserved areas of the country.”
CUNA’s study, and its accompanying materials, have been used by credit unions nationwide to show policymakers the cost of regulatory burden. Many have been able to use the data to show costs within their own states.