First and foremost, let’s be clear: NAFCU listened to its members in 2009, and we listen to them now. We fight every day to make our members and the credit union movement stronger. As noted correctly in Ms. Anderson’s column, NAFCU has always been steadfast in strongly opposing the CFPB’s rulemaking authority over credit unions. At every possible opportunity, in hearings and in myriad letters to Congress, NAFCU has been unequivocal in its conviction.
Throughout the legislative negotiations in 2009, NAFCU strongly challenged the CFPB’s authority over credit unions. Specifically, it was at the hearing before the House Committee on Small Business on Sep. 23, 2009, where Price Choppers Employees Federal Credit Union President and CEO Dawn Donovan, testifying on behalf of NAFCU, clearly stated our position. Notably, this was the only official hearing where credit union trade groups testified before Congress on financial reform, including the creation of the CFPB (earlier proposed as the CFPA). As Donovan pointed out:
“NAFCU does not believe such an agency should be given authority over regulated federally insured depository institutions, and opposes extending this authority to credit unions.
“As the only not-for-profit institutions that would be subject to the CFPA, credit unions would stand to get lost in the enormity of the proposed agency. Giving the CFPA the authority to regulate, examine and supervise credit unions, already regulated by the NCUA, would add an additional regulatory burden and cost to credit unions.”
Over time in subsequent testimony, we have been unwavering about the CFPB and the dangers of overregulation on credit unions.
As SRP Federal Credit Union President and CEO Ed Templeton, who is also NAFCU’s board chair, testified just this year:
“As expected, the breadth and pace of CFPB rulemaking is troublesome, and the unprecedented new compliance burden placed on credit unions has been immense.
“The impact of this growing compliance burden is evident as the number of credit unions continues to decline, dropping by 22% (more than 1,700) in institutions since 2007. A main reason for the decline is the increasing cost and complexity of complying with the ever-increasing onslaught of regulations. Since the second quarter of 2010, we have lost 1,100 federally insured credit unions, 96% of which were smaller institutions below $100 million in assets. Many smaller institutions simply cannot keep up with the new regulatory tide and have had to merge out of business or be taken over. Credit unions need regulatory relief, both from Congress and their regulators.”
Our position was not a politically popular one, nor was it an easy one to take. NAFCU’s board of directors and our lobbying team stood strong under unbelievable political pressure throughout the Dodd-Frank Act negotiations. But then again, NAFCU has never shied away from difficult positions. Over the years, NAFCU has always taken positions that are in the best interests of NAFCU members and the credit union industry. And that will never change.
Ms. Anderson is also correct in noting that the CFPB represents a significant hazard for credit unions – especially when you consider that not all the Dodd-Frank rules have been implemented yet. According to the Davis Polk report, in the first quarter of 2015, 235 (60.3%) of the 390 total required rulemakings have been finalized, while 84 (21.5%) rulemaking requirements have not yet been proposed. With still so many rules outstanding, it is a rather ominous outlook for credit unions and all the more reason for us to stand fast by our position.
NAFCU continues to believe credit unions should be exempt from CFPB rulemaking, and we will continue to advance that with full vigor at every juncture possible because it is the right thing to do. For us, there is little comfort in being right and seeing our worst predictions regarding the burden of overregulation come to fruition while our industry erodes.
B. Dan Berger is president/CEO of NAFCU. He can be reached at 703-522-4770 or dberger@nafcu.org.
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