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Two reports released last week – one from the Office of Financial Research (OFR) and one from the Treasury Department – highlight concerns with regulation that impact credit unions. Specifically, the OFR report supports NAFCU's argument that the size of a financial institution does not equate to risk.

The OFR report, released Thursday, criticized banking regulators' use of asset-size thresholds to determine a financial institution's systemic risk. The report calls for reforms to the Dodd-Frank Act to allow regulators – like the Consumer Financial Protection Bureau (CFPB) – to look at multiple factors in addition to size to determine the risk an institution would pose on the financial system if it failed.

"Some large banks may not be systemically important; and conversely, some smaller banks might be," the report states. "Bank size alone does not equate to risks a firm may pose to financial stability."

NAFCU has long argued that size does not equate to risk. The association also continues to advocate that no credit union, regardless of size, should fall under the CFPB's regulatory authority, as credit unions were not the bad actors that spurred the financial crisis.

Also Thursday, the Treasury Department released its third report on financial regulation. Though the report focuses mainly on insurance and asset management, it does contain a few important recommendations that will affect credit unions.

The report recommends delaying the implementation of the Department of Labor's (DOL) fiduciary rule until its impact is further evaluated. The rule affects how financial advisers may advise clients on retirement savings; NAFCU has aired concerns about the rule's indirect costs on credit unions. The association has said the final rule should be revoked or that credit unions should be exempt from it.

The Treasury's report also suggests the Department of Housing and Urban Development reconsider its disparate impact rule, which expanded the department's interpretation of the Fair Housing Act to make insurers and lenders liable for adverse impact on protected groups without proof of intent to discriminate. While NAFCU supports fair lending, the association has warned against overly burdensome regulations that make it more difficult for credit unions to serve their members.