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July 19, 2012 – Testifying on behalf of NAFCU, Lynette Smith, CEO of Washington Gas Light FCU in Springfield, Va., will tell a House subcommittee today how difficult and costly the Dodd-Frank Act has proven to be for her credit union, which only counts 17 employees.

Speaking before the House Financial Services Subcommittee on Oversight and Investigations at a hearing on the Dodd-Frank Act's impact, Smith will point out that NAFCU's previously voiced concerns that the Consumer Financial Protection Bureau's efforts would invariably hurt community-based financial institutions like credit unions have proven to be well-founded.

In testimony prepared for today's hearing, Smith notes that in the last few years, there have been extensive changes made on a range of issues, from new credit card legislation to new disclosure requirements. In fact, credit unions will need to be in compliance with the nearly 2,000 pages of the CFPB's first two major rule proposals. "I cannot overemphasize how burdensome, expensive and unnecessary Dodd-Frank Act-related compliance costs will be for credit unions," she says. "The greatest impact will likely come from the ever increasing burden of new regulations, whether from the CFPB or functional regulators."

Smith will also tell committee members that her staff at Washington Gas Light FCU have already spent countless hours updating disclosure booklets and websites and are constantly reviewing documents to ensure compliance with the never-ending changes to laws and regulations. Rather than looking to hire a new loan officer, Smith has made it a priority to hire a full-time compliance officer. Smith, in written testimony, notes that staff time dedicated to compliance has meant some Washington Gas Light members have had to wait longer for their loans.

She will also note that operating expenses at her credit union rose from $1.83 million in 2006 to $2.79 million in 2011, largely due to regulatory compliance burden, while the number of employees has remained constant.

In light of the negative impact on credit unions, Smith is calling on Congress to urge regulators to "do more robust cost/benefit analysis of potential regulations and follow-up once the regulations are in place, and make changes if the costs are too high." She says that amending or eliminating outdated regulations must be a priority.

NAFCU continues to call for the Financial Stability Oversight Council to take its responsibility to facilitate regulatory coordination seriously. "As NAFCU-member credit unions have testified on numerous occasions, it is not any single regulation, but an accumulation of regulations from numerous regulators operating independently of each other with little to no coordination that magnifies the undue regulatory burden credit unions face today," she says.

Smith's complete written testimony can be viewed here.