Regulatory Relief

Credit unions did not contribute to the financial crisis yet are still subject to increasing regulatory requirements mandated under the Dodd-Frank Act. Accordingly, broad-based regulatory relief continues to be a top priority for NAFCU and its member credit unions. In addition to NAFCU's five-point plan for regulatory relief, NAFCU called on Congressional leaders to embrace bipartisan regulatory relief in a letter outlining top priorities for the 115th Congress, including:

  • Preservation of the Credit Union Tax Exemption
  • Repealing the Durbin Amendment
  • Capital Reform /Risk-based Capital
  • Data/Cyber Security
  • Housing Finance Reform
  • Member Business Lending

On November 17, 2016, the NCUA Board approved, as part of the agency's 2017-2018 budget, ten recommendations from the agency's Exam Flexibility Initiative  working group, including an extended 18-month exam cycle for well-managed, low-risk federal credit unions with assets of less than $1 billion. The extended exam cycle went into effect January 1, 2017. Previously, NAFCU urged NCUA to reduce unnecessary costs by reverting to an 18-month exam cycle. On September 3, 2015, NCUA responded to NAFCU's recommendation and indicated that the agency is open to the idea.

Effects of Dodd-Frank on Credit Unions

Average FTEs by Compliance Area

Credit unions have seen the average number of full-time employees devoted to compliance work increase at least 75 percent since the passage of Dodd-Frank in 2010.

Barriers to Growth over the next 3 years

Total compliance expenses have grown by an estimated 59 percent since Dodd-Frank, and they are expected to grow by 86 percent over the next three years. Mortgage regulations led to the greatest increase in expenses since Dodd-Frank as respondents reported a 200 percent increase in estimated costs.

Recent Activity on Capitol Hill

In June 2017, House Financial Services Committee Chairman Jeb Hensarling's (R-TX) Financial CHOICE Act of 2017 was passed by the House of Representatives. The CHOICE Act includes reform of Consumer Financial Protection Bureau as well as numerous NAFCU-supported regulatory relief provisions already marked-up and passed by the committee. The measure now awaits consideration by the Senate. NAFCU will continue to work to ensure that the best interests of credit unions are preserved as the bill moves through the legislative process.

Additional regulatory relief provisions introduced this Congress include:

  • H.R. 26, the Regulations from the Executive in Need of Scrutiny Act of 2017 (REINS Act). This measure, which has passed in the House, would require Congress to hold an up-or-down vote prior to enactment of any regulation expected to have an economic impact exceeding $100 million.
  • H.R. 1116, the Taking Account of Institutions with Low Operation Risk Act of 2017 (TAILOR Act). would require that rules be tailored to fit financial institutions’ business models and risk profiles. Companion legislation, S. 366, has also been introduced in the Senate.

 In the 115th Congress, NAFCU members have also testified before various congressional committees on behalf of the association to educate lawmakers on the pressing need to provide regulatory relief to the nation's credit unions. On June 8, 2017, Steve Grooms, President/CEO at 1st Liberty Federal Credit Union, testified before the Senate Banking Committee at a hearing entitled “Fostering Economic Growth: The Role of Financial Institutions in Local Communities.” Grooms outlined how Dodd-Frank regulations have harmed his credit union and the industry as a whole and called on Congress to clarify the CFPB's ability to exempt credit unions from certain rules.  

On March 21, 2017, Keith Stone, President/CEO at The Finest Federal Credit Union, testified before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit at a hearing entitled "Ending the De Novo Drought: Examination the Application Process for De Novo Financial Institutions." Stone called on Congress to reduce the regulatory obstacles that burden credit unions both during the initial chartering stage as well as when new product lines are introduced.

Regulatory relief for community based financial institutions was also hot topic in the 114th Congress. NAFCU testified before the House Financial Services and Senate Banking Committees on regulatory relief priorities for credit unions including the impact of NCUA's second risk-based capital proposal, field of membership changes, and a plethora of other issues outlined in NAFCU's 5 Point Plan for Regulatory Relief. 

In September 2016, House Financial Services Committee Chairman Jeb Hensarling introduced the Financial CHOICE Act of 2016, which prescribed regulatory relief for financial institutions in a number of different realms.  NAFCU submitted comments on the discussion draft of the bill in July 2015 and on the final bill before the Committee's markup.

In the 114th Congress, the Financial Services Committee also held two markups (I, II) covering several NAFCU-backed, regulatory relief measures. Additionally, Chairman Richard Shelby (R-AL) and the Senate Banking Committee moved a comprehensive measure, the Financial Regulatory Improvement Act, which also contained several provisions directly impacting credit unions.  In late July 2015, the Senate Appropriations Committee favorably reported the Financial Services and General Government appropriations bill for fiscal 2016 with the text of S. 1484 attached.

On May 23, 2016, the House of Representatives passed H.R. 2121, the Safe Transitional Licensing Act of 2015. A follow-up to the 2008 Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act, which set minimum standards for the licensing and registering of state-licensed mortgage loan originators, this measure would allow registered originators to move to another state or change jobs from a depository institution to a non-bank lender and continue originating loans for 120 days while obtaining a new license. The bill will need to be reintroduced in the 115th Congress.

On April 13, 2016, the House Financial Services Committee favorably reported H.R.4894. Sponsored by Rep. Lynn Westmoreland (R-Ga.), the bill would repeal Title II – the orderly liquidation authority – of the Dodd-Frank Act.

On March 2, 2016, the Committee favorably reported H.R. 2896, the Taking Account of Institutions with Low Operation Risk (TAILOR) Act of 2015. The bill, introduced by Representatives Scott Tipton (R-CO) and Andy Bar (R-KY), would require that rules promulgated by federal regulators, such as CFPB and NCUA, be tailored to fit financial institutions' business models and risk profiles. The bill would also require NCUA and CFPB to testify annually before the House Financial Services and Senate Banking Committees on specific actions taken to comply with the measure.

On December 3, 2015, Congress passed NAFCU-backed legislation (H.R. 1259), introduced by Rep. Andy Barr (R-KY), as part of a transportation re-authorization package. The legislation, which has since been signed into law, is helpful to small creditors, including credit unions, as they deal with CFPB's definition of "rural areas" particularly as it is related to the ability-to-repay rule and QM definition.

NAFCU welcomes this step and supports other bipartisan initiatives to improve the CFPB's ability-to-repay rule including ensuring mortgages held in portfolio are automatically considered QMs.

In the 113th Congress, the House considered and passed by voice vote a standalone measure (H.R. 3468) that amends the Federal Credit Union Act to require that pass-through share insurance coverage be provided when a credit union member holds funds on behalf of a nonmember in trust accounts, such as Interest on Lawyers Trust Accounts (IOLTAs). The Senate passed the House bill by unanimous consent, and the bill was signed into law by the President. 

NAFCU has testified before Congress on regulatory relief numerous times and looks forward to future opportunities before key lawmakers. Recent regulatory relief testimony includes:

Steve Grooms, President and CEO of 1st Liberty FCU for the Senate Banking, Housing and Urban Affairs Committee, "Fostering Economic Growth: The Role of Financial Institutions in Local Communities” 

Keith Stone, President and CEO of The Finest FCU before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, "Ending the De Novo Drought: Examining the Application Process for De Novo Financial Institutions." 3/21/2017

Scott Eagerton, President and CEO of Dixies FCU before the House Small Business Committee Subcommittee on Economic Growth, Tax and Capital Access, "Financing Main Street: How Dodd-Frank is Crippling Small Lenders and Access to Capital." 9/17/2015

Peggy Bosma-LaMascus, President and CEO of Patriot FCU before the House Financial Services Committee, "Preserving Consumer Choice and Financial Independence." 3/18/2015

Ed Templeton, President and CEO of SRP FCU before the Senate Banking Committee, "Regulatory Relief for Community Banks and Credit Unions." 2/12/2015

Linda McFadden, President and CEO of XCEL FCU before the Senate Banking Committee, "Examining the State of Small Depository Institutions." 9/16/2014

David Clendaniel, President and CEO of Dover FCU before the House Financial Services Committee, "Examining Regulatory Relief Proposals for Community Financial Institutions" 7/15/2014

Daniel Weickenand, President and CEO of Orion FCU before the House Financial Services Committee, "How Prospective and Current Homeowners Will Be Harmed by the CFPB's Qualified Mortgage Rule" 1/14/2014

Robert Burrow, President and CEO of Bay Heritage FCU before the House Financial Services Committee, "Examining Credit Union Regulatory Burdens"4/10/2013

NAFCU's Position on Regulatory Relief

Please be assured that NAFCU will continue to push for commonsense regulatory reform on Capitol Hill with an emphasis on the five areas outlined in our plan below and available for download.

NAFCU's Five-Point Plan for Regulatory Relief - Revised February 2015

1. Capital Reforms for Credit Unions

Modernize capital standards for credit unions in order to reflect the realities of the 21st century financial marketplace:

  • Authorize a true risk-based capital system for credit unions that more accurately reflects a credit union's risk profile.
  • Give the National Credit Union Administration (NCUA) authority to allow supplemental capital accounts for credit unions that meet certain standards.
  • Authorize the NCUA to further establish special capital requirements for newly chartered federal credit unions that recognize the unique nature and challenges of starting a new credit union. (Given that very few new credit unions have been chartered over the past decade, and in order to encourage the chartering of new credit unions.)

2. Field of Membership Improvements for Credit Unions

Make improvements to the Federal Credit Union Act to help enhance the federal credit union charter:

  • Improve the field of membership (FOM) restrictions that credit unions face, including expanding the criteria for defining "urban" and "rural."
  • Allow voluntary mergers involving multiple common bond credit unions.
  • Allow credit unions that convert to community charters to retain their current select employee groups (SEGs).
  • Allow all credit unions, regardless of charter type, to add underserved areas to their field of membership.
  • Authorize the NCUA to grant parity to a federal credit union on a broader state rule, if such a shift would allow them to better serve their members and continue to protect the National Credit Union Share Insurance Fund.

3. Reduce Consumer Financial Protection Bureau (CFPB) Burdens on Credit Unions

Credit unions did not cause the financial crisis, but have been victims in the new tide of regulations aimed at those institutions who did, with over 1,000 institutions disappearing since the passage of the Dodd-Frank Act, primarily due to the new regulatory burdens.

  • Exempt all credit unions from CFPB rulemaking and examination authority, since NCUA once again has been given authority to write all rules for credit unions, tailoring new proposals to meet the special nature of the credit union industry.
  • Authorize the NCUA to delay the implementation of a CFPB rule that applies to credit unions, if complying with the proposed timeline would create an undue hardship.
  • Authorize the NCUA to modify a CFPB rule for credit unions, provided that the objectives of the CFPB rule continue to be met.
  • Require the NCUA and the CFPB to conduct a look-back cost-benefit analysis on all new rules after three years. The regulators should be required to revisit and modify any rules for which the cost of complying was underestimated by 20% or more from the original estimate at the time of issuance.

4. Operational Improvements for Credit Unions

Credit unions stand willing and ready to assist in our nation's economic recovery. Our industry's ability to do so, however, is severely inhibited by antiquated legislative restrictions.

  • Modify the arbitrary and outdated credit union member business lending (MBL) cap to help create American jobs. This can be done by raising the current 12.25% limit to 27.5% for credit unions that meet certain criteria or by raising the outdated "definition" of a MBL from last century's $50,000 to a new 21st century standard of $250,000, with indexing for inflation to prevent future erosion. MBLs made to veterans, non-profit religious organizations, businesses in "underserved areas," or small businesses with fewer than 20 employees should be given special exemptions for the arbitrary cap.
  • Eliminate statutory requirements to mail redundant and unnecessary privacy notices on an annual basis, provided that the credit union's policy has not changed and additional sharing of information with outside entities has not been undertaken since the distribution of the previous notice.
  • Give the NCUA greater flexibility in how it handles credit union lending, such as the ability to establish longer maturities for certain loans.
  • Enact new examination fairness provisions to help ensure timeliness, clear guidance and an independent appeal process free of examiner retaliation.

5. 21st Century Data Security Standards

Credit unions are being adversely impacted by ongoing cyber-attacks against the United States and continued data breaches at numerous merchants. The cost of dealing with these issues hinders the ability of credit unions to serve their members. Congress needs to enact new 21st century data security standards that include:

  • Paying costs associated with a data breach by those entities that were breached.
  • Establishing national standards for the safekeeping of all financial information.
  • Requiring merchants to disclose their data security policies to their customers.
  • Requiring the timely disclosure of entities that have suffered a data breach.
  • Establishing enforcement standards for provisions prohibiting merchants from retaining financial data.
  • Requiring the timely notification of the account servicer if an account has been compromised by a data breach.
  • Requiring breached entities to prove a "lack-of-fault" if they have suffered from a data breach.

Recent Media Outreach

NAFCU has stayed at the forefront of this issue and continued to champion credit unions in major media nationwide.

New Rules From CFPB, DoD, FASB: Enough's Enough, NAFCU Tells Agency (, August 8, 2016)

NAFCU: No 2016 NCUSIF Premium Needed, But These Threats Must Be Monitored (, August 3, 2016)

Ways NCUA Can Improve Exams, Supervision Are Identified In NAFCU, CUNA Letters (, August 1, 2016)

Dodd-Frank Compensation Rules Shouldn't Apply to Credit Unions (Credit Union Times, July 22, 2016)

NCUA Board Approves New Exam Schedule for Well-Capitalized CUs (Credit Union Journal, July 21, 2016)

House Panel Grapples With Fintech Oversight (Credit Union Times, July 13, 2016)

Bill Aims to Ease Regulatory Burden on Smaller Banks (TheMReport, July 13, 2016)

Reps Applauded For Including Relief Provisions (, July 12, 2016)

CUNA Endorses Hensarling's Off-Ramp for Reg Relief (Credit Union Times, July 11, 2016)

House Leaders Urged To Retain CU-Backed Provisions (, June 23, 2016)

NAFCU: Going Full Throttle for Credit Unions (Credit Union Times, June 12, 2016)

Congress Told CUs Should Not Be In The 'Crosshairs' (, June 9, 2016)

Hensarling's Dodd-Frank Kryptonite Draws Mixed Response (US News & World Report, June 7, 2016)

GOP Unveils Dodd-Frank Overhaul (TheMReport, June 7, 2016)

Republicans Roll Out Dodd-Frank Alternative (DSNews, June 7, 2016)

Wrong Number: NAFCU Presses FCC On Proposed Changes To TCPA (, June 7, 2016)

Hensarling Unveils Dodd-Frank Repeal (Credit Union Times, June 7, 2016)

NAFCU Calls for 'Common Sense Interpretation' of 'Residential' Phone Line (, May 3, 2016)

NAFCU's Berger Meets With House Ways & Means Subcommittee Chair (, April 21, 2016)

Concerns Abound Over FASB's Credit Losses Proposal (Credit Union Times, April 13, 2016)

 Obama Calls For Reg Relief In State Of Union Address (, January 13, 2016)

NAFCU Responds to President Obama's State of the Union Address (January 12, 2016)

Trade Groups Plan New Push For Reg Relief (, January 5, 2016)

In Short Legislative Year, Focus Will Be On Cutting Reg Burden (, January 4, 2016)

GAO: Dodd-Frank regs weighing on community banks, credit unions (The Hill, December 30, 2015 - also picked up in Credit Union Times, Credit Union Journal,, HousingWire, Daily Business News, and TribLIVE. )

Reg Relief Provisions Now Go Before Senate As… (, November 9, 2015)

House Passes Bill Trades Hope Will Bring CU Reg Relief (, November 5, 2015)

Dodd-Frank Increases Compliance Costs Five-Fold: Eagerton (Credit Union Times, September 17, 2015)

CEO Shares Reg Burden Examples During Congressional Testimony (, September 17, 2015)

Championing Regulatory Relief and Data Security Legislation (Credit Union Times, September 11, 2015)


NAFCU posts its regulatory relief "top 10" wish list(HousingWire, August 4, 2015)

NAFCU Statement on House Financial Services Committee Approval of Regulatory Relief Bills (July 29, 2015)  

Credit Unions Fighting for Survival (Wall Street Journal, July 23, 2015)

NAFCU Statement In Response to Senate Appropriations Committee Mark-up of "Financial Services and General Government Appropriations" Bill (July 23, 2015)

View more of NAFCU in the News

Recent Policy Letters

Read recent letters from NAFCU to members of Congress on the important issue of regulatory relief for credit unions.

5-1-17 NAFCU Letter on Tomorrow's Mark-Up of H.R. 10, the Financial CHOICE Act

4-25-17 NAFCU Letter on Tomorrow's Hearing on the Financial CHOICE Act

4-13-17 NAFCU Letter on Proposals to Foster Economic Growth

4-5-17 NAFCU Letter on Tomorrow's Hearing, "Examination of the Federal Financial Regulatory System and Opportunities for Reform"

3-21-17 Testimony of Keith Stone for the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, "Ending the De Novo Drought: Examining the Application Process for De Novo Financial Institutions"

1-19-17 NAFCU Letter on Reintroduction of the Financial CHOICE Act

1-4-17 NAFCU Letter in Support of Regulatory Relief for Credit Unions in the REINS Act of 2017

9-28-16 NAFCU Letter in Support of H.R. 6094, the "Regulatory Relief for Small Businesses, Schools, and Nonprofits Act"

9-12-16 NAFCU Letter on H.R. 5983, the Financial CHOICE Act of 2016

8-25-16  NAFCU Letter to Donald Trump on Regulatory Relief

7-14-16 NAFCU Comments on the Financial CHOICE Act Discussion Draft

7-11-16 NAFCU Letter on Tomorrow's Hearing on Title I of the Financial Choice Act

7-5-16 NAFCU Letter on Tomorrow's Hearing and the Impact of Federal Regulations on Credit Unions

6-8-16 NAFCU Letter on the Impact of Over-regulation on Credit Unions

4-4-16 NAFCU Letter on Tomorrow's Hearing, "Assessing the Effects of Consumer Finance Regulations"

3-1-2016 NAFCU Letter on Wednesday's Markup of the TAILOR Act

2-23-2016 NAFCU Letter on Tomorrow's Hearing, "Triple Threat to Workers and Households: Impacts of Federal Regulations on Jobs, Wages and Startups"

2-9-2016 NAFCU Letter on Standing Ready to Assist in Reducing Regulatory Burdens Effort

1-5-2016 NAFCU Letter in Support of the SCRUB Act of 2015

1-4-2016 NAFCU Letter on 2016 Legislative Priorities for Congress

12-3-2015 NAFCU Letter on Privacy Notice and Rural Area Relief in H.R. 22 Conference Report

12-2-2015 Joint Trades Letter in Support of H.R. 3192, the "Homebuyers Assistance Act"

11-17-2015 NAFCU Letter in Support of H.R. 1210, the "Portfolio Lending and Mortgage Access Act"

10-27-2015 NAFCU Letter on Tomorrow's Hearing, "The State of Rural Banking: Challenges and Consequences"

9-29-2015 NAFCU Letter on Tomorrow's Full HSFC Mark-Up of Credit Union Regulatory Relief Legislation

9-14-2015 Joint Letter in Support of S. 2006, the "Regulatory Accountability Act of 2015"

9-8-15 Joint Trades Letter on Regulatory Relief for Financial Institutions

7-28-2015 NAFCU Letter on Regulatory Relief for Credit Unions in the REINS Act of 2015

7-27-2015 NAFCU Letter on Parity for Credit Unions in Section 928 of the FY 2016 FSGG Appropriations Bill

5-20-2015 NAFCU Letter on the Financial Regulatory Improvement Act 

4-22-2015 NAFCU Letter on Regulatory Burdens Faced by Credit Unions

4-13-2015 NAFCU Letter in Support of Regulatory Relief for Credit Unions

3-23-2015 NAFCU Letter on Legislation to Relieve Regulatory Burden on Community Financial Institutions

2-24-2015 NAFCU Letter on Regulators Using Exemptions to Provide Regulatory Relief to Credit Unions

View all NAFCU Policy Letters

Updated June 2017