WASHINGTON – The credit union lobby on Tuesday urged Congress to get the new Consumer Financial Protection Bureau to ease off credit unions and focus its attention on unregulated entities and big banks.
In testimony on Capitol Hill, the president of Ohio’s Wright-Patt CU urged lawmakers to use provisions included in the Dodd-Frank Act to exempt credit unions and banks from a growing number of regulatory initiatives the new consumer agency is planning, particularly an unfurling array of mortgage rules. “We believe the Bureau has more authority than it has been exercising to extend relief to credit unions and others from certain compliance responsibilities,” Doug Fecher, head the $2.5-billion credit union, told the House Oversight Committee during yesterday’s hearing on the new consumer bureau.
“It is important that Congress aggressively urge the Bureau to utilize the exemption clause so that the weight of compounding regulations that are intended for abusers and the largest of financial institutions do not overburden credit unions and other smaller financial institutions,” said Fecher, who was representing CUNA at yesterday’s hearing.
The credit union lobby, which opposed creation of the new consumer agency to begin with, has stepped up its efforts for an exclusion from a variety of new regulations, including on mortgages, credit cards and remittances.
NAFCU urged the lawmakers to see that the regulators do a strong cost-benefit analysis of potential regulations and to review and streamline regulations where possible.
Yesterday’s session follows a May hearing in which two credit union executives likewise urged exemptions for credit unions from new CFPB regulations.
“Credit unions face a crisis of creeping complexity with respect to regulatory burden,” said Wright-Patt’s Fecher. “It is not just one new law or revised regulation that challenges credit unions, but the cumulative effect of all regulatory changes.”
“The frequency with which new and revised regulations have been promulgated in recent years and the complexity of these requirements is staggering. Since 2008, we estimate that credit unions have been subjected to in excess of 120 regulatory changes from at least 15 different federal agencies,” he testified.
Fecher noted that part of the Dodd-Frank bill gives the new consumer agency the authority to “exempt any class of provider from its rulemaking.” “We believe the Bureau has more authority than it has been exercising to extend relief to credit unions and others from certain compliance responsibilities,” he said. “We encourage Congress to urge that the Bureau exercise its authority as broadly as possible to protect credit unions from burdensome overregulation, which ultimately impacts consumers.”