RANCHO CUCAMONGA, Calif.—While the attention has been on regulatory relief, one expert believes passage of S. 2155 will bring many new revenue opportunities to credit unions.
“The new legislation is a first step towards providing relief to smaller banks and credit unions from what some would call costly and burdensome rules,” said Jim Hanisch, president, CO-OP Network, CO-OP Financial Services, pointing to some of regulation’s rules, such as an increase in the asset size definition for too-big-to-fail banks and elimination of some consumer protection rules.
“The hope is that this new law will enable credit unions to focus more on their business instead of diverting capital and resources to satisfying regulatory requirements,” he said. “In fact, I believe S. 2155 signals the beginning of continued positive change for credit unions.”
Hanisch said that the rollback of these regulations will translate into a “breadth” of new revenue opportunities for credit unions.
“More importantly, it will ensure financial access to millions of people who otherwise would have been shut out of the American Dream,” he said.
New Revenue Opportunities
Hanisch said that a large number of the bill’s provisions relate to mortgage lending.
“The bill amends the Federal Credit Union Act to allow a CU to extend a business loan for a dwelling regardless of whether the dwelling is the member’s primary residence,” said Hanisch. “There are a number of provisions that really open up the mortgage lending side of the house.”
He pointed out, too, that with the bill requiring the Social Security Administration to develop a database to facilitate the verification of consumer information, that it might lead to revenue opportunities for credit unions.
“I think there may be things around identity that could be done by credit unions, coupled with a variety of agencies, such as the Social Security Administration,” he said. “Credit unions and banks both are in the unique position of following Know Your Customer requirements. If you know who your customer is and you can confirm customers’ IDs, I think there are parties that would be willing to pay for that.”
Jim Hanisch
Hanisch also noted that while it’s not a revenue opportunity, the legislation does simplify some regulatory reporting, which will save credit unions time and money.
CUs Back S. 2155
Hanisch addressed how credit unions backed S. 2155. Many of those efforts have been featured in CUToday.info.
“All told, more than 5,000 credit union leaders met with their legislators to build congressional support for S. 2155. If ever there was an example of the collective power of the credit union movement, it is the passage of this historic legislation,” he said. “CUNA, state credit union leagues, credit unions and credit union members all had a hand in getting this historic bill through Congress and onto the President’s desk.
“Certainly, we are grateful to everyone in our CO-OP ATM and CO-OP Shared Branch networks community who helped bring this much-needed legislation to the table—and who championed the needs and rights of members in keeping with our movement’s people helping people mission,” Hanisch said.
While S. 2155 was a win for credit unions, more work needs to be done at the legislative level, reminded Hanisch.
“We encourage our credit union partners to continue working together with us as we aim to drive our movement forward,” he said.