Newsroom

The Dodd-Frank Act and its regulations are not to blame for the decline in the number of community banks, according to a report released Wednesday from the White House Council of Economic Advisers, but NAFCU's Carrie Hunt said common sense dictates otherwise.

While the report makes no mention of credit unions, Hunt, NAFCU's executive vice president of government affairs and general counsel, said "a substantial number of the credit unions that closed or merged did so due to overwhelming compliance costs related to stifling regulatory burden.

"Without exemptions from rules designed to rein in bad actors, credit unions are being forced to comply with regulations that only the largest banks can afford," she added. "In fact, many big banks view these regulations as a competitive advantage."

NAFCU and its members have testified on the damaging impact of Dodd Frank on credit unions numerous times before Congress. Excerpts of the testimony were referenced yesterday in a House Financial Services Committee Republican blog post in response to the report.

The country has lost more than 1,500 federally-insured credit unions since the second quarter of 2010. NAFCU has cited the crush of rules from CFPB under the Dodd-Frank Act as a key contributor to that burden.

NAFCU was the only credit union trade association to oppose subjecting credit unions to CFPB authority under Dodd-Frank. The association maintains that CFPB has the authority – and should be using that authority – to exempt credit unions from regulations aimed at bad actors.

A bipartisan group of 329 House members and 70 senators have also asked CFPB Director Richard Cordray to do more to exempt and better tailor rules for credit unions.

NAFCU also recently urged NCUA to be more proactive in collaborating with CFPB and other regulators to ensure credit unions are not subject to conflicting or redundant regulation.

Credit unions have the opportunity to hear directly from their lawmakers and regulators on the issue of overregulation, and more, during NAFCU's Congressional Caucus, Sept. 18-21 in Washington.