WASHINGTON — Lawmakers voiced bipartisan support for regulatory relief during the Credit Union National Association government affairs conference on Tuesday, arguing that small financial institutions have had to bear the brunt of too many regulations.
“It is time to cut through the red tape … and we have to do it right now,” said Sen. Roy Blunt, R-Mo., vice chairman of the Senate Republican Conference, while noting that Republicans are in the unique position of having control of the House, Senate and White House.
“I am opposed to every single regulation that we absolutely don’t have to have, and I think that stream is flowing pretty strong in the country right now, and in Washington right now," Blunt said. "And who knows how long that will last? So we have to make the most of the moment when people are willing to look at these regulations."
He was joined by Rep. Denny Heck, D-Wash., who spoke at the conference after Blunt. Heck, who once worked at a credit union, said, “I do worry about credit unions because ... I have seen firsthand the stacks of compliance documents.”
On the sidelines of the conference, Heck said “there are lots of Democrats who are interested in regulatory modernization and dealing with the very real compliance burdens, especially on smaller banks and credit unions.”
But Heck warned that Democrats are not willing to go as far as some Republicans in reforming the Dodd-Frank Act.
“We are not willing to throw the baby out with the bath water,” said Heck, who is on the House Financial Services Committee.
He said that he would not support a proposal by the panel's chairman, Rep. Jeb Hensarling, R-Tex., that would replace the Dodd-Frank Act with an alternative regulatory framework. That bill, which is called the Financial Choice Act, passed the committee last year and an updated version is expected to be reintroduced later this year.
“The Choice Act … basically gutted Dodd-Frank and we are not going there,” Heck said. “We want to have an adult conversation about how we can make this work better for community banks and credit unions, and there will be plenty of us at the front of the line” to do that.
Blunt said he supported a piece of legislation that would force regulators to do a cost-benefit analysis before implementation if it would have a significant economic impact.
“I would like to see the Senate pass the bill that the House has already passed,” Blunt said.
He added that he is working with Sen. Tom Carper, D-Del., on a data security bill that would create a single standard for data breaches and a separate bill that would make merchants that take credit cards “have some stake in the game.”
Heck, meanwhile, defended the Consumer Financial Protection Bureau, arguing that credit unions and community banks benefit from its existence.
“One of the reasons the [CFPB] was created was to put all lenders on an even playing field,” Heck said. “I think it should be a real benefit for credit unions.”
He also said the National Credit Union Administration could do more to help credit unions facilitate short-term loans to members in a cash crunch.
“One of the roles that credit unions have always played is offering a financial lifeline for short-term consumer loans,” Heck said. “The NCUA has held credit unions to a must tougher standard than nonbank short-term lenders are held to in many states.”
