Hillary Clinton’s newly released plan to rein in regulations for credit unions and cultivate the growing fintech sector was music to the movement’s ears.
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The key to helping small businesses, said Clinton, is to help credit unions and community banks by reducing regulation and cutting the compliance burden.
“Way too many dreams die in the parking lots of banks,” Clinton wrote, echoing a line from her speech at the Democratic National Convention last month. “My plan will reduce unnecessary regulations on local community banks and credit unions, while defending tough the new rules on big Wall Street banks.”
Additionally, Clinton’s plan is to expand access to credit for the underserved communities throughout the country, as well as “doubling support for community development financial institutions.”
Trades Applaud HRC’s Position
The National Association of Federal Credit Unions (NAFCU) and the Credit Union National Association (CUNA) heralded the Presidential hopeful’s plan to “cut red tape” as a positive step for the industry and the country.
“We applaud Secretary Clinton’s recognition of the importance of credit unions as a resource for capital for small businesses,” NAFCU’s President and CEO Dan Berger said in a statement, “Credit unions proved their mettle throughout the crisis providing much-needed capital to small business.” Berger suggested that CUs are extremely ready to provide assistance to small businesses but the increasing regulatory burden and consolidation of the industry is holding them back.
While not endorsing the Democratic nominee, CUNA President and CEO Jim Nussle (a former Republican member of the House) praised Clinton’s plan and “applauded” the campaign for “recognizing the importance of small financial institutions like credit unions to the nation’s job creators.” The industry group also noted its research has shown a 12.58% decrease in small business lending by banks since the start of the economic crisis nearly a decade ago. During the same time period, CUNA noted, credit unions have increased small business lending by 120.53%.
Easier Said Than Done?
Despite the credit union community cheering Clinton’s calls for reg relief,
Indeed, pulling back the layers of regulatory burden on credit unions may be easier said than done.
Consumer Financial Protection Bureau President Richard Cordray recently rebufed federal legislators’ calls for the Bureau to utilize its exemption powers to provide regulatory relief for credit unions. Cordray stated that the CFPB has already tailored many regulations for the industry, including the qualified mortgage rule, Truth in Lending and data-reporting requirements under the Home Mortgage Disclosure Act.
NAFCU’s VP of Legislative Affairs Brad Thaler described Corday’s response as falling short; he also urged Senators Joe Donnelly, D-Ind., and Ben Sasse, R-Neb. to take action themselves on the issue. Unless Clinton has any tricks up her sleeve to sway the CFPB’s feelings on exemptions, she may need to default to the legislative houses for change.
Mary Dunn, a former deputy chief advocacy officer for executive and regulatory affairs at CUNA who now works at the Washington-based consulting firm CU Counsel, said even though the election is more than two months away, the statement from the presidential candidate bodes well for credit unions. “The challenge will be after the election to make this statement a reality when so many other priorities will be facing the new Administration,” she added.
Moreover, Clinton’s plan also calls for increased support for Community Development Financial Institutions, the State Small Business Credit Initiative and the Small Business Administration.
