Act Now to Get Compliance Burden Under Control
It's time for financial institutions to demand compensation for doing the work of government agencies. Anyone else feeling a little put out by the raft of regulations and compliance issues we face every day? It's long overdue that we get serious about regulatory effects on our bottom lines and the cost to the member. It is time for a concentrated effort, by the affected, to demand compensation for the efforts we make that are mandated by government, but rightfully the responsibility of government agencies that get off scott free while we do their work.
The cost of compliance is now over $1 trillion annualized. Anyone think that this is good for America? Of course it is not. So given the bureaucratic reluctance to stem their writings in the interest of the country we must develop a strategy that makes sense and encourages a slowing of the tide.
We are not alone in our displeasure at politicians efforts to "prove how much they care" by passing legislation that they contend will protect the citizenry but really only adds costs to the lives of the electorate. So if they are really convinced they are doing good work lets demand we are fairly compensated when we do their work. We should reach out to the community bankers ,as well as anyone else interested in a political push to get these costs recovered and eliminate this unfair "taxation" that falls to our members.
Develop a plan that unites Financial Institutions with a common purpose that spearheads demands to compensate FI's for compliance efforts unrelated to their primary objectives. Simple yet potentially very effective particularly if the costs are paid from the budgets of the agencies charged with the enforcement process.
Suppose we manage to get the principal of reimbursement for costs approved by Congress for BSA compliance, Patriot Act, Red Flag etc. In reality these are not efforts made to provide efficient and consumer friendly activities within the industry's but regulations spawned in large part by the posturing of politicians who feign patriotism in search of votes. Once the government realizes the effect, by writing billions of dollars worth of checks, only the unaffected would not see the need to cut back on writings that accomplish little but increase costs mightily.
A word of caution! Don't expect the trades to voluntarily go to bat for this type proposal. They are making too much money "educating you on compliance issues" and will resist this because it affects their bottom lines. Only a concentrated outpouring of demands, from the grassroots, will force their hand but credit unions and community bankers must keep the pressure up by constantly reminding their members and clients as well as the Board members of Trade Associations of the absolute need for compensation legislation. It's ok to tell your members about these huge costs and urge them to call their elected officials. It's ok to tell the board directors of your trade association that they better join in or writing that dues check will be problematic for your credit union. Its time to put a little direct heat on the locations that will do the most good and all of us must be involved.
Failure to act will only encourage more of the avalanche. Failure to act will cause continued examiner focus on these issues rather than the issues of safety and soundness that have in large part been ignored with massive NCUSIF costs to our members. Failure to act will ensure the compression and continuing consolidation that will eventually destroy our movement.
In the words of Thomas Jefferson: "If we can stop the Government from wasting the labors of the people, under the pretense of caring for them, we shall be happy."
Dennis Moriarity, CEO
Unity CU, Warren, Mich.
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