5 years of Dodd-Frank no cause for celebration, says Berger op-ed
The Dodd-Frank Wall Street Reform and Consumer Protection Act, which turns five years old today, has been costly for credit unions and is no reason for celebration, NAFCU President and CEO Dan Berger writes in an op-ed in today's American Banker.
Credit unions didn't cause the financial crisis of a few years ago, says Berger, but they've paid a high price in new regulatory burdens for Wall Street's antics since Dodd-Frank was signed into law.
Berger noted that the 2010 statute spawned the Consumer Financial Protection Bureau and an onslaught of new regulations. While larger credit unions (those over $10 billion in assets) are exempt from CFPB examination and enforcement authority, all credit unions are feeling the crushing effects of the bureau's rulemaking, he writes.
"Dodd-Frank has created a huge regulatory morass that has stifled innovation, delayed economic growth and sped consolidation within the credit union industry," Berger says. "The regulatory burden and escalating compliance costs based on rules promulgated under Dodd-Frank by the CFPB have helped lead to the loss of 1,250 federally-insured credit unions – more than 17% of the industry – since the second quarter of 2010."
Berger points out NAFCU supports several proposals that could slow down the growing burden on credit unions, among them:
- H.R. 1266, the "Financial Product Safety Commission Act of 2015," which would shift the leadership of the CFPB away from a single director to a five-member commission appointed by the president; and
- S. 1484, the "Financial Regulatory Improvement Act of 2015," and other bills that would give credit unions greater regulatory relief.
House Financial Services Chairman Jeb Hensarling, R-Texas, in an opinion piece this past weekend in The Wall Street Journal, noted the nation has lost one community bank or credit union each day since enactment of the Dodd-Frank Act.