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Lawmakers query CUNA on Dodd-Frank impact
WASHINGTON (3/3/11)--After testifying on the impact of the Dodd-
"We are concerned that this is a train wreck for consumers," CUNA President/CEO Bill Cheney said when questioned by federal lawmakers on the impact statutory changes to interchange fees would have. "But we can stop it before it happens," the CUNA leader added. (CUNA Photo)
Frank law on credit unions, Credit Union National Association (CUNA) President/CEO Bill Cheney responded to lawmakers’ questions on interchange provisions, at one point saying, “We’re concerned this is a train wreck for consumers, but we can stop it before it happens.” Cheney had just finished testifying at the House Financial Services subcommittee on financial institutions and consumer credit hearing. Responding to a question from Rep. David Scott (D-Ga.), Cheney went on to say that without regulatory enforcement of an intended small-issuer exemption that would cover all but three credit unions, consumers’ costs for debit card services could be driven up. And that, the CUNA leader said, “drives people out of the banking system and impacts most those who can least afford it.” Cheney also fielded questions from Rep. Carolyn Maloney (D-N.Y.), who underscored that the crisis, intended to be addressed by Dodd-Frank, was not caused by small institutions. “If anything you were a rock on which to lean, and continue to be,” she said. Does this help bring in payday lenders and other players in the “shadow” banking system under the same regulation, she asked. Cheney responded: “Credit unions already are the most highly regulated financial institutions. We’re not in favor of additional regulation for other financial institutions. But I do think parts of the financial services system not currently regulated could benefit from additional oversight.” Maloney went on to ask how the credit union burden could be further reduced. “We can’t simplify just by creating new regulation. We have to peel back outdated and duplicative regulation,” Cheney answered. Rep. Jim Renacci (R-Ohio) asked a question about credit union costs for sustaining capital. “Every dollar credit unions have to spend on compliance is a dollar that has to come out of the bottom line and their retained earnings.” For credit unions, Cheney noted, that $1.5 billion cost is the difference between continued economic recovery and continued losses.


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