Three Key Tenets To Help With Regulations To Come

I don't have to tell you that the pace of regulation is accelerating and that this year the regulatory burden on our industry is expected to reach epic proportions, posing challenges for even the most business savvy credit union executive.

How do credit unions continue to operate effectively and efficiently and serve your members well with the mounting compliance burden?

Here are three key tenets that will serve credit unions well in managing through the onslaught to come.


1. Growth through Innovation. Credit unions are reaping the rewards of new membership brought by heightened awareness of the credit union value proposition. Now is the time to leverage those new member relationships. The defining characteristic of credit unions has always been the personal member experience. We should all strive to deepen that connection and increase engagement to solidify and build on the relationships we have with our members, most especially those who are new. We saw a record increase in credit union mortgage originations in 2012. As the economy continues its steady recovery a number of other growth areas will begin to emerge.

Access is also becoming increasingly important. Recently, credit unions achieved the best score in customer satisfaction for mobile banking--beating out big banks, credit card and brokerage firms, according to ForeSee Mobile Satisfaction Index.


2. Data-Driven Improvements. In today's fast-paced world, just about everything is measurable. Data is driving business and consumer decisions more than ever before. Regular member feedback is vital to identify new product or service needs, prevent future issues from arising, and ensure members are being well-served.

According to ACSI's December 2012 Customer Satisfaction survey, our industry is already doing a great job serving our members. Credit unions scored higher than banks for the fifth straight year. That steadfast commitment will help promote continued confidence and long term sustainability in the future.

To help our members enhance their competitive edge, NAFCU has also enhanced its product offerings. The brand new NAFCU's CU Industry Trends Report is a benchmarking tool to help credit unions compare themselves to their peers and remain competitive in the marketplace.


3. Steadfast Advocacy. The steady stream of new regulations requires constant vigilance necessitating the review of legacy processes and the implementation of effective change control procedures sooner rather than later. We must also continue to capitalize on every opportunity to lobby, and comment on proposed regulations. Input from those who must live with the result is critical.

Based on the feedback you have provided to us, we have been aggressively urging greater efficiency and effectiveness from the regulators.


Where CFPB Should Focus

We consistently reminded the Consumer Financial Protection Bureau (CFPB) that instead of adding additional unnecessary regulations on consumer-friendly and highly regulated credit unions, it should focus its efforts on unregulated entities, such as nonbanks and payday lenders. We also pressed the CFPB to delay and/or defer implementation dates once a final rule is issued to give credit unions as much time as possible to comply.

There are signs we're being heard. In November, CFPB Director Richard Cordray announced his intention to issue a proposal that both revises the international remittance rule and delays its implementation until 90 days after the changes are finalized. Also in November, the CFPB said it was formally delaying the effective date of certain new mortgage disclosures until its TILA/RESPA integrated disclosures are finalized and set to take effect.

We are pleased the bureau showed willingness to not only listen, but to also adjust and make common sense changes to its timelines.

In every comment letter to NCUA, the administration and the CFPB, we continue to emphasize the unprecedented regulatory burden credit unions face. NAFCU has been successful in slowing the pace of regulatory issuances from the NCUA and delaying the implementation of several regulatory proposals.

We have also been vocal and steadfast in insisting on transparency and accountability in every area of NCUA's operations, but particularly in regards to its budget. Most recently, NCUA released an extensive number of documents in response to criticism of its 2013 budget increase. NAFCU continues to request a return of the agency's budget hearings and greater fiscal restraint.

Unfortunately, the regulatory challenges do not appear to be abating any time soon. If anything, they will continue to grow. You might say that this is our "new normal" and we need to adjust to it. That's why it is imperative that we continue to be proactive.

We appreciate you voicing your concerns and providing us substantive detail as to the impact of onerous regulation. Rest assured for its part, NAFCU will continue to advocate on your behalf.

Fred R. Becker, Jr. is the president and CEO of the National Association of Federal Credit Unions. He may be reached at fbecker@nafcu.org or 703-522-4770.