Sept. 12, 2012 – Credit unions are “ready to do more” to promote job creation, but an ever-increasing regulatory burden remains a major obstacle, wrote NAFCU Executive Vice President of Government Affairs Dan Berger in a Sept. 11 CU Times editorial.
The Consumer Financial Protection Bureau created by the Dodd-Frank Act has issued more than 3,500 pages of new rules alone from late June to August 2012, “an astronomical amount of regulation in an unbelievably short timeframe,” Berger noted. That doesn’t include the requirements imposed on credit unions by NCUA, the Federal Reserve, the Financial Crimes Enforcement Network and other federal agencies and departments.
The heavy burden of compliance means that “many credit unions may decide to opt out of certain lines of business, leaving consumers to search for certain products and services from larger, more expensive providers and predatory lenders,” he cautioned.
Over-regulation is also bad for the economy generally, Berger said. Data from the Competitive Enterprise Institute show that 212 of the 4,128 federal regulations in the works last year promise at least $100 million in economic impact. In addition, costs associated with regulatory compliance are estimated to be $1.75 trillion, roughly equal to about 48 percent of federal spending and 11.7 percent of total GDP.
To address this, NAFCU continues to work diligently by communicating credit unions’ concerns to the administration, the CFPB and others, Berger said. But to maximize the effectiveness of the industry’s outreach on this issue, credit unions must contact their congressional representatives “and let them know how the burden of over-regulation is impacting you and your members.”
At stake is more than just credit unions’ ability to serve their members, but “our nation’s financial future.”