|| NAFCU witness Lynette Smith told a House Financial
Services subcommittee that she's concerned about
how to stay responsive to members' needs in light of
Dodd-Frank Act regulatory burdens. – Dietsch photo
July 20, 2012 – NAFCU witness Lynette Smith told lawmakers Thursday that the regulatory burdens faced by her $86.9-million-in-assets credit union under the Dodd-Frank Act are “overwhelming” and that there are some services she could be forced to end one day as a result.
Smith, president and CEO of Washington Gas Light FCU in Springfield, Va., told Rep. Michael Capuano, D-Mass., during a hearing of the House Financial Services Subcommittee on Oversight and Investigations she is concerned about a proposed rule that would implement new compliance burdens for credit unions that provide international remittance transfer services. During the exchange, Capuano pledged to look into that issue.
The rule proposed by the Consumer Financial Protection Bureau would provide a safe harbor for institutions that facilitate no more than 25 transfers a year, but her credit union does three a month (36 a year) and would not benefit under the provision.
“That’s catastrophic,” she said. “I might get to the point where I cannot even offer it.”
Asked by Rep. James Renacci, R-Ohio, about her greatest concerns under the Dodd-Frank Act, Smith said she is very concerned about the debit interchange price cap.
As to the impact generally of the 2,300 pages of Dodd-Frank rules out so far, she replied, “I’m going to have to hire a compliance officer full-time at this point,” and she said that yes, fees could rise later as a result.
Smith summed up her concerns this way. “Credit unions have always been the lender of last resort. When I have members come into my office, and I know they have no other place to go, I can provide them a loan within an hour,” she said. “I want to continue to do that.”
Credit unions work with the “grass roots,” she said. “That’s what we’re in business for.”
In other comments, Smith pointed to NAFCU’s recent letter to Treasury Secretary Tim Geithner urging him to use his role as chairman of the Financial Stability Oversight Council, created under the Dodd-Frank Act, to ensure the council’s member agencies coordinate their regulatory activities to help control the growth of regulatory burden so credit unions can focus on member service.
“NAFCU urges the Subcommittee to use its oversight authorities with the FSOC and to keep the FSOC’s role in mind moving forward as the full impact of Dodd-Frank unfolds at our nation’s credit unions,” she testified.
The letter to Treasury, sent in late June, was entered into the record of another hearing held Thursday on the Dodd-Frank Act’s impact on consumer choice and access to credit.