WASHINGTON—The Chairman of the Federal Reserve Wednesday addressed the importance of providing regulatory relief to smaller banks, comments CUNA hopes the CFPB and NCUA will remember when they craft new rules that impact credit unions.
Testifying before the U.S. House Financial Services Committee, Fed Chair Janet Yellen first outlined how strengthening supervision of big banks is essential, saying changes have been made to supervise large financial institutions on a more coordinated, forward-looking basis.
“At the same time, we have been careful to make more-measured changes in our approach to regulating and supervising firms at the other end of the spectrum,” Yellen said. “Smaller institutions did not emerge from the financial crisis unscathed, and we have identified several areas in which the supervision of these institutions can be strengthened. At the same time, we are well aware that regulatory and compliance costs can impose a burden that is disproportionate to the risks these institutions pose to taxpayers and financial stability. We are committed to ensuring that the supervision of smaller institutions is tailored appropriately to their risk.”
Responding to Yellen’s comments, Ryan Donovan, CUNA chief advocacy officer, said, “If regulators put the Fed chair's commonsense words about smaller financial institutions into action, credit unions would be exempt from the vast majority of the Consumer Financial Protection Bureau’s rulemakings and the National Credit Union Administration would refrain from applying policies and practices designed for too-big-too-fail banks to credit unions.”