NAFCU testifies today on CUs’ reg burdens, relief needs
Dec. 3, 2013 – NAFCU witness Linda Sweet, president and CEO of Big Valley FCU of Sacramento, Calif., will detail for a House Small Business subcommittee today specific steps Congress should take to help ease overregulation, which has hurt her credit union and its ability to serve members.
Sweet will testify before the Subcommittee on Investigations, Oversight and Regulation this morning on her credit union’s experience with the extreme ramp-up in regulation since the financial crisis, which has hampered member service and her credit union’s ability to offer the same mortgage products it once did.
“We have actually started to outsource many of our mortgages because we cannot afford a loan officer with the qualifications that new CFPB regulations require,” Sweet says in her testimony. “In addition to requiring a member to turn elsewhere for a product we once offered them, they are faced with increased costs that often rise to several thousands of dollars. That certainly seems like an unintended and unnecessary cost to the consumer that the new agency was meant to protect.”
Sweet cites the fact that more than 800 credit unions have closed their doors since 2009. She notes that a NAFCU survey found that more than 70 percent of credit union respondents are forced to ask non-compliance staff members to take on compliance duties in response to increased regulation.
She also highlights the stress caused by the lengthening of the NCUA examination process, saying that what was once “3 to 5 days of helpful input and teamwork … now requires months of preparation.”
“It seems that these exams are taking longer due to the large number and complexity of regulations and not because of the increasing size or complexity of the credit union,” she says.
Sweet will urge lawmakers to look to the suggestions of the NAFCU five-point plan for regulatory relief, and the legislation its provisions have been incorporated into, including H.R. 2572, the “Regulatory Relief for Credit Unions Act,” introduced by Rep. Gary Miller, R-Calif. In particular, she encourages:
- strengthening NCUA;
- modernizing capital standards for credit unions;
- improving the federal credit union charter;
- raising the member business lending cap; and
- improving data security.
Linda Sweet testimony