Newsroom

NAFCU witness Steve Grooms, president and CEO of 1st Liberty Federal Credit Union of Great Falls, Mont., told the Senate Banking Committee "the time to act is now and we stand ready to work with you" on meaningful regulatory relief for the credit union industry.

During the hearing, "Fostering Economic Growth: The Role of Financial Institutions in Local Communities," Grooms testified that credit unions are suffering under the compliance burden resulting from laws meant to curb bad actors after the financial crisis, despite the fact that credit unions were not to blame for the crisis and continued lending when others did not. Grooms noted that more than 1,500 – more than 20 percent – of credit unions have closed since the enactment of the Dodd-Frank Act, "with many citing the growing compliance burden as the reason they can't survive."

Grooms noted that if Congress wants to foster economic growth, it is vital to enact regulatory relief measures for credit unions, including: relaxed field-of-membership restrictions, modernized credit union capital standards, exemptions from rules targeting banks and larger institutions including the Home Mortgage Disclosure Act, more freedom for member business lending and a total credit union exemption from the CFPB's rulemaking.

In response to a question from Subcommittee on Securities, Insurance and Investment Chairman Mike Crapo, R-Idaho, about qualified mortgage rules, Grooms said mortgages are an "integral part" of member service for credit unions and that those mortgage rules prevent credit unions from lending to many worthwhile borrowers.

Credit union representatives made up half of Thursday's witness list of six. In addition to Grooms, the panel heard from Dallas Bergl, CEO of INOVA Federal Credit Union, on behalf of CUNA; and John Bissel, president and CEO of Greylock Federal Credit Union. Representatives of the American Bankers Association and Independent Community Bankers of America also testified, as did Georgetown University law professor Adam Levitin.

The Senate Banking Committee plans to hold future hearings regarding broader economic growth topics.