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NAFCU witness Linda Sweet, president and CEO of Big Valley FCU in Sacramento, Calif., told a House Small Business subcommittee Tuesday that overregulation has hurt her credit union's ability to help senior citizens and the underserved and vulnerable.

Sweet testified before the Subcommittee on Investigations, Oversight and Regulation on Tuesday, about 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 testified. "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 and subcommittee Chairman David Schweickert, R-Ariz., discussed regulatory burden matters following the conclusion of Tuesday's hearing.

Subcommittee Chairman David Schweikert, R-Ariz., highlighted Sweet's comments about the difference in the availability and fees for an average mortgage loan, for her region, of $350,000; she said the fees have nearly tripled, and that many of her members are choosing to rent instead.

Sweet also told Rep. Tom Rice, R-S.C., that members whom Big Valley must now direct to third parties are upset that they can't continue to be serviced by Big Valley and still pay lower fees. Rice asked Sweet if lower-income and middle-class people would be more affected by restrictive mortgage regulations than the wealthy, and Sweet said they would.

Sweet urged 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.

In her testimony, Sweet said more than 800 credit unions have closed their doors since 2009. She added that in a NAFCU survey, more than 70 percent of credit union respondents said they are forced to ask non-compliance staff members to take on compliance duties in response to increased regulation.

Also testifying were Hester Peirce of George Mason University, B. Doyle Mitchel of Industrial Bank in Washington, D.C., the Independent Community Bankers of America and Adam Levitin, a professor at Georgetown University.