WASHINGTON (7/24/14)--Former Democratic Rep. Barney Frank said he supports raising the threshold for examination by the Consumer Financial Protection Bureau to financial institutions above the current $10 billion-in-assets cutoff.
Frank, a former House Financial Services Committee chairman and co-drafter of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, said this while testifying Wednesday before that panel at a hearing examining the four years since the passage of the Dodd-Frank Act.
The Credit Union National Association advocated the same position before the committee in a regulatory relief hearing last week. The higher exemption would be important to credit unions and community banks. For those with assets below the threshold, examination for compliance with consumer financial protection laws would remain with their prudential regulator, rather than with the Consumer Financial Protection Bureau. For credit unions that is the National Credit Union Administration.
The former congressman from Massachusetts did not propose any specific asset level for a higher exemption, stating that any number is "arbitrary."
The role of credit unions and other community financial institutions came up several times over the course of the hearing:
- Rep. Gregory Meeks (D-N.Y.) said the act has given credit unions and community banks a "foundation to build upon," and that these institutions are starting to lend more, but more carefully since the act was passed;
- Rep. Sean Duffy (R-Wis.) said that instead of ending "too big to fail," the act has helped larger institutions and hurt credit unions and other small institutions because families and businesses are finding it harder to access credit under the weight of excessive regulations;
- Rep. Dennis Ross (R-Fla.) said credit unions in his district have had a more difficult time doing residential mortgages with new regulations; and
- Rep. Randy Hultgren (R-Ill.) said credit unions are among the industries he counts as being disproportionally affected by Dodd-Frank, but that the parts relating to them can be fixed.