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CU CEO to tell of 'crisis of creeping complexity ' during House reg relief hearing
WASHINGTON (7/15/14)--The Credit Union National Association will testify on various regulatory relief matters today at a House Financial Services Committee hearing titled "Examining Regulatory Relief Proposals for Community Financial Institutions." The hearing will feature discussion of nine bills and testimony from six individuals.

Doug Fecher, president/CEO of $2.8 billion-asset Wright-Patt CU, Beavercreek, Ohio, will testify on behalf of CUNA.

"Credit unions face a crisis of creeping complexity with respect to regulatory burden.  It is not just one new law or revised regulation that challenges credit unions, but the cumulative effect of all regulatory changes," he said. "The frequency with which new and revised regulations have been promulgated in recent years and the complexity of these requirements is staggering."

CUNA has estimated credit unions have been subjected to more than 180 regulatory changes since 2008.

"When a regulation is changed, there are certain upfront costs that must be incurred no matter the size of the institution: staff time and credit union resources must be applied in determining what is necessary in order to comply with the change; forms and disclosures must be changed; data processing systems must be reprogrammed; and staff must be retrained," Fecher said.

CUNA will testify on the following bills at the hearing:
  • The Regulation D Study Act (H.R. 3240), which directs the Government Accountability Office to study the impact of the Federal Reserve Board's monetary reserve requirements, implemented through Regulation D, on depository institutions, consumers and monetary policy;

  • The American Savings Promotion Act (H.R. 3374), which seeks to offer parity to financial institutions wishing to offer raffle-based prize-linked savings accounts to consumers;

  • The Community Bank Mortgage Servicing Asset Capital Requirements Study Act of 2014 (H.R. 4042), which directs the federal banking agencies to conduct a study of appropriate capital requirements for mortgage servicing assets for non-systemic banking institutions;

  • The SAFE Act Confidentiality and Privilege Enhancement Act (H.R. 4626), which would allow state and federal regulatory officials with mortgage or financial services industry oversight authority access to any information provided to the Nationwide Mortgage Licensing System and Registry without the loss of confidentiality protections provided by federal and state laws; and

  • The End Operation Choke Point Act of 2014 (H.R. 4986), which would amend the appropriate federal banking statutes, including the Federal Credit Union Act, to bar regulators from prohibiting, restricting or discouraging insured depository institutions from serving entities that are licensed or authorized to provide products and services, is a registered money transmitting business or has a reasoned legal opinion that demonstrates the legality of the entity's business.
CUNA has also been asked to provide comment on the discussion draft of the Access to Affordable Mortgages Act of 2014, which would amend the Truth in Lending Act to exempt certain higher-risk mortgages from property appraisal requirements.

Fecher will emphasize the importance of reducing the strain of regulatory burden on smaller financial institutions.

"If Congress wants credit unions and other small community based financial institutions to survive, the avalanche of regulatory change must end," he said.

The other bills that will be discussed at the hearing do not directly impact credit unions; CUNA does not have a position on them presently.

Fecher will also testify on the National Credit Union Administration's risk-based capital proposal, the Credit Union Residential Loan Parity Act (H.R. 4226), the Consumer Financial Protection Bureau's examination thresholds and exemption authority, and the impact of effective dates for new regulations.


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