SAN ANTONIO, Texas – Credit union executives urged Congress this morning to step in and alleviate a rapidly growing list of new regulations affecting credit unions and banks.
“To give you a sense of what we are up against in terms of regulatory burden,” said Maria Martinez, president of Border FCU, who was testifying at a field hearing of the House Financial Services Committee, “there are at least 27 rulemaking proposals pending at various agencies.” She cited proposals before NCUA, the Department of Housing and Urban Development, the Federal Housing Finance Agency, Financial Accounting Foundation, Internal Revenue Service, and the newly created Consumer Financial Protection Bureau.
“The flood of regulations creates an unnecessary burden without any measure of the effectiveness of these changes, and there is no end in sight,” said Martinez, head of a $107 million credit union in the Del Rio, Texas, on the Mexican border.
“These seemingly unending changes in regulatory requirements make it more complicated for us to serve our members,” said Martinez. “It is not necessarily any one single regulation that is overly burdensome but rather the totality of regulations, the frequency with which the regulations change, and the sometimes varying application of the regulation by field examiners which sometimes conflicts with or expands upon the original intent of the regulation.”
Robert Glenn, president of San Antonio’s Air Force FCU, told the committee his $340 million credit union has “struggled at times to meet the compliance burden brought on by new regulations and by regulatory changes” that have accompanied a flurry of new regulations implementing recent laws like the Credit Card Act of 2009 and the Dodd-Frank Act. The compliance burden for the average Texas credit union of $22 million and eight fulltime employees “truly must be daunting,” he told the lawmakers.
The congressional panel is studying ways it may help reduce the regulatory burden on community financial institutions. The credit union representatives were testifying this morning along with executives of Pecos County State Bank, Frost Bank, United Bank of El Paso de Norte, Commerce Bank and Accion Texas Inc.
Among the actions suggested by the credit union executives are amending the Electronic Funds Transfer Act to require one--not two—disclosures of fees charged to non-customers, which has created a growth industry of lawsuits; an ease on new regulations for international remittances; creation of a new examinations appeal process for NCUA and the bank regulators; and an increase in the cap on member business loans.
