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Latest News: Governmental Affairs

House Subcommittee Holds Hearing Examining Credit Union Regulatory Burden

Thursday, April 11, 2013   (0 Comments)
Posted by: Susan Dyer
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On April 10, the House Financial Services Committee Financial Institutions and Consumer Credit Subcommittee held a hearing on "Examining Credit Union Regulatory Burdens." 

This was the 13th time since the 112th Congress that CUNA provided testimony on this issue, evidence that the issue of regulatory reform and the crisis of creeping complexity continues to be a hot topic among credit unions across the country and on Capitol Hill.

Appearing on behalf of the Credit Union National Association, Pamela Stephens, the President/CEO of Security One Federal Credit Union ($55 mil) in Arlington, Texas, stressed the need for regulatory relief for credit unions. In her comments, she introduced subcommittee members to CUNA’s 35-point plan for relieving credit union regulatory burden.  

"The costly and pervasive impact of these rules on credit union operations, a number of which are detailed and complex, covering hundreds of pages, simply cannot be overstated,” said Stephens in her testimony.  "Because credit unions are financial cooperatives, owned by their members, costs a credit union bears to meet the multitude of wide-ranging regulatory training and compliance responsibilities are ultimately paid by their members.”  

Ryan Donovan, CUNA senior vice president of legislative affairs, said the hearing is an indication that lawmakers have heard the need for credit union regulatory relief "and are preparing to put a solution on the table."

Subcommittee members showed interest in regulatory relief for credit unions and asked a number of questions regarding the topics of qualified mortgages, the true costs of regulatory burdens, and credit union member business lending.  

The CUNA 35-point plan for comprehensive regulatory relief includes the following items:
  • Requiring the National Credit Union Administration budget process to become more transparent by, for instance, requiring an annual open hearing on its spending plans;
  • Helping credit unions make more small business loans by: fully exempting government-guaranteed business loans from the MBL cap; and increasing the de minimis credit union business loan amount to $500,000, among other changes;
  • Making improvements to Regulation D, such as increasing the number of automatic transfers allowed from a members savings to share accounts;
  • Increasing the maturity limit for higher education loans made by federal credit unions; and
  • Increasing the NCUA board membership from three members to five members, including a state regulator's presence, and modernizing other aspects of the board structure.
View the Proposed 35-point plan and the testimony.