WASHINGTON-What would regulations look like in an ideal world?
There would be greater clarity-and, for that matter, brevity-in the regulations themselves, which would also help credit unions more effectively comply, says State Department FCU's Devin Lyon.
Lyon said the CFPB's strong consumer emphasis does an excellent job informing credit union members in plain English about the nature of changes to the law, but the bureau's efforts are much less effective when it comes to educating the institutions it expects to carry out the changes, he says.
"I'd like to see compliance officers have a one- to two-page breakdown of the rule, the financial products it affects and the due dates," Lyon says. "To have something like this to share with board and staff and help me prioritize tasks would be fantastic."
A reasonable period of response and compliance would also help. "This is very, very critical," Lyon adds.
CUNA's Kathy Thompson agrees. "We need to put the changes in plain English with reasonable response dates that show a clear understanding of how long the changes are going to take," she says. "CFPB is a new agency, so we don't have as good a give-and-take as we do with the other agencies. I'd like to see a better dialogue occur between regulators and the regulated about how credit unions can better answer the agency's questions."
Greater examination efficiencies also would help ease the compliance burden, explains NASCUS's Mary Martha Fortney. But no matter how smoothly things go, financial institutions will likely see regulatory oversight to a greater or lesser degree as a necessary evil. These days, many agree, credit unions could all stand a little less evil and a little more understanding.
"If you talk to banks they will say they are over-regulated, and credit unions would probably say the same," Fortney says. "In a perfect world, we'd all work together to create a regulatory approach that gives credit unions the flexibility while assuring adequate safety and soundness practices. But that will take a while."
