WASHINGTON—Two credit union representatives have testified today before Congress on why the need for regulatory relief has become critical.
Testifying on behalf of NAFCU, Ed Templeton, CEO of SRP FCU in North Augusta, S.C., told the Senate Banking Committee that “the need for regulatory relief is even stronger in 2015,” saying help is needed to reduce the “onslaught” of new rules from NCUA, the CFPB and other regulatory agencies.
Templeton told the committee that 1,100 federally insured credit unions have shut their doors since the fourth quarter of 2010, 96% of which were institutions of less than $100 million in assets. While credit unions take safety and soundness seriously, said Templeton, the regulatory pendulum has swung too far, and over-regulation is now stifling “economic growth.”
NCUA’s proposed risk-based capital plan is among the proposed new regulatory burdens that are “unnecessary,” said Templeton, who told Congress the proposal will mean a $470-million hit if the two-teir proposal is implemented. In addition, he called on Congress to update NCUA’s FOM rules.
“NAFCU believes reasonable improvements to current field-of-membership restrictions should include streamlining the process for converting from one charter type to another, updating and revising population limits in NCUA’s field of membership rules, and making statutory changes to make it easier for all credit unions to add underserved’ areas within their field of membership or continuing serving their current select employee groups (SEGs) when they change charters,” he states.
He also said that NCUA should have “reverse wild card” authority so federal credit unions can request a waiver from the agency so they may follow a state rule if it would serve their members more efficiently.
As for the CFPB, Templeton said credit unions and their members are suffering through “unintended consequences,” especially in the lending arena.
“In particular, the ability-to-repay, qualified mortgage, and mortgage servicing rules have required credit unions of various sizes and complexities to make major investments and incur significant expenses,” he testified.
Templeton said the CFPB should:
- Use its legal authority to exempt credit unions from various rulemakings.
- Should amend Regulation E to allow financial institutions to truncate account numbers on periodic statements.
- Should expand the threshold for the safe harbor from the definition of “remittance transfer provider” to ensure that a meaningful safe harbor is established.
- Should limit the changes to the Home Mortgage Disclosure Act (HMDA) dataset to those mandated by Dodd-Frank.
- Should make improvements to the integrated disclosures rule under the Truth in Lending Act and Real Estate Settlement Procedures Act (TILA/RESPA) and the Qualified Mortgage (QM) standard.
Wally Murray, CEO of Greater Nevada Credit Union, also appeared before the committee, testifying on behalf of CUNA.