Smith, in hearing on CFPB reform, to focus on ways to ease reg burden
Oct. 29, 2013 – Lynette Smith is testifying on behalf of NAFCU about several CFPB reform bills before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit today, focusing on NAFCU-supported proposals to reform the agency.
Smith is the president and CEO of Washington Gas Light FCU in Springfield, Va. In her written testimony, Smith discusses the costly burden of complying with new regulations and how it has hurt the credit union industry:
“I cannot emphasize enough how burdensome and costly the unnecessary and duplicative compliance costs are to credit unions …With thousands of pages of CFPB rules and proposals to interpret and ultimately comply with, the regulatory onslaught continues for credit unions. As the Subcommittee is aware, credit unions, many of which have very small compliance departments, and in some cases a single compliance officer, must comply with the same rules and regulations as our nation’s largest financial institutions that employ countless numbers of lawyers and compliance staff.”
She presents data on how credit unions continued to serve communities when banks stopped lending during the financial crisis, and how the regulations previous to the creation of the CFPB worked for credit unions.
NAFCU was the only financial services trade association to oppose credit unions of any size being placed under the CFPB’s direct regulatory authority, Smith notes. And while NAFCU consistently supported a consumer financial protection entity that would regulate underregulated bad actors, the association believes the Federal Credit Union Act, which was already in existence when the CFPB began, was sufficient for the credit union industry.
Among the NAFCU-supported proposals to reform the agency are: to change the agency’s structure; to give the Financial Stability Oversight Council more power to veto CFPB rules; and for the agency to increase the security for the sensitive data it collects.