Credit union leaders from around the country are gathering in the nation's capital this week for NAFCU's Congressional Caucus and making their case to lawmakers — face to face — for relief from new regulations that impact service to our nearly 104 million member-owners.
While many lawmakers ready themselves for the November elections, regulators, especially the Consumer Financial Protection Bureau (CFPB), have already had a busy year. Our institutions are busy combing through a payday lending proposal, a final mortgage servicing rule and an outline of proposals under consideration relating to third-party debt collection. Additions to our regulatory burden seem to be always just around the corner.
It is clear that we cannot just sit and wait for a break in new rules and regulations. Aside from the proposals introduced this year, the industry is also prepping compliance for the Department of Defense's final Military Lending Act rule changes, which take effect Oct. 3. It also won't be long, Jan. 1, 2018, before changes to the Home Mortgage Disclosure Act rules come into play.
Relief from these onerous regulations cannot be achieved without the support of a strong, loud credit union voice. An involved membership will be our greatest asset as we work together towards easing the regulatory burden.
No Sugarcoating
There is no way to sugarcoat the facts. Since the enactment of the Dodd-Frank Act, we have lost more than 1,500 federally insured credit unions — more than 20 percent of the industry. Overregulation of the industry played a big role for those credit unions that were forced to merge or shut their doors for good.
This is why our lawmakers need to hear from credit union industry leaders. When lawmakers hear about the difficulties faced by financial institutions in their own backyards, serving their own constituents, they are more apt to help.
As we know, our members know, and as lawmakers and regulators have themselves attested in recent years, credit unions are the good guys in the consumer financial services space. We didn't participate in the practices that led up to the 2008 financial crisis. In fact, we maintained — and even stepped up — our lending to our members and their small businesses when they needed it most. But because of the many bad actors in the financial services arena, we often get swept into regulations meant to curtail the activities of those bad actors and the harm they caused to the American economy.
NAFCU has been persistent in urging the CFPB to use its Dodd-Frank Act authority to provide greater exemptions and better tailor its rules to meet the concerns of community institutions, such as credit unions. But as good as NAFCU and its staff are at fighting on our behalf, we have a responsibility to make our voices heard.
Make Your Voice Heard
This is why events like Congressional Caucus are so important. When we meet one on one with lawmakers and regulators, they are able to put a face to the institutions and consumers that have been damaged most by overregulation. When you're talking about the impact of onerous rules on nearly 104 million constituents, lawmakers have little choice but to listen.
The more in touch we are with our policymakers, whether we are reaching out while in Washington, D.C., or inviting them to visit our credit unions, the more likely we are to see some relief.
It is important for our industry to weigh in with regulators and lawmakers on the issues that affect credit unions and their members. They need to hear our story on how we, and our members, are impacted by the decisions they make on myriad topics. After all, despite the new compliance burdens coming down the pike, we still need to fight to preserve our tax exemption and our access to the secondary mortgage market, among many other issues, in order to keep our top-level service to our members.
Today's credit unions are strong and resilient. It is our day-to-day focus on our members that keeps us grounded and thriving, and that is the story we need to share with policymakers.
The industry has come through some turbulent times, and we have challenges facing us still, but I have no doubt that credit unions will continue to prevail. I look forward to seeing many credit union leaders in Washington this week as we advocate together for our industry.
We're a powerful industry, with a powerful voice.
Richard L. Harris, president and CEO of Caltech Employees Federal Credit Union and chair of NAFCU.
