WASHINGTON (4/10/13, Updated 3:30 p.m. ET)--Credit unions did not cause the financial crisis and don't engage in abusive practices, but "are being forced to pay the price and comply with the same rules designed for those who did cause the crisis," Security One FCU, Arlington, Texas, CEO Pamela Stephens said on behalf of her credit union and the Credit Union National Association at a House Financial Services subcommittee hearing today.
CUNA offered a 35-point plan for comprehensive regulatory relief that would help credit unions better serve their members by ceasing to require the diversion of so many resources to compliance with burdensome regulation.
Stephens, who is CEO of $55-million-in-assets Security One FCU, Arlington, Texas, told members of the House Financial Services financial institutions and consumer credit subcommittee that the burden of complying with ever-changing regulatory requirements is particularly onerous for small institutions like hers.
"If a smaller credit union offers a service, it has to be concerned about complying with most of the same rules as a larger institution, but can only spread those costs over a much smaller volume of business," she said in a prepared statement.
Regulatory burden is "a key reason that roughly 300 small credit unions merge into larger credit unions each year," she added.
Around 3,000 credit unions have five or fewer employees, CUNA notes.
"Regulatory burden is not a new problem for credit unions, but it is getting worse," she said. Since 2008, credit unions have been subjected to 157 rule changes from over 15 agencies, with most written before the Consumer Financial Protection Bureau issued its first rule. "That's almost one a week," Stephens said.
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