WASHINGTON (6/24/13)--A rule to raise the "small business" size standard for credit unions from $175 million in assets to $500 million, which was strongly supported by the Credit Union National Association when it was proposed, was approved last week by the U.S. Small Business Administration.
It goes into effect July 22.
The new size standard permits a greater number of credit unions, though still a relatively small number, to benefit from provisions that require federal agencies to assess and minimize regulatory costs for smaller entities, including those associated with the Regulatory Flexibility Act (RFA) and the Small Business Regulatory Enforcement Fairness Act (SBREFA).
When commenting on the proposed rule, CUNA noted research results that showed SBA that both credit unions and banks with less than $500 million in assets are unlikely to have a compliance officer on staff.
CUNA also documented that credit union and banks with $175 million to $500 million in assets employ 75 FTEs on average, whereas those with $500 million to $750 million on average have double the number of employees.
"This further supports the concern that smaller institutions simply have fewer resources to meet compliance responsibilities," CUNA wrote.
While CUNA welcomed the higher standard, the group noted that the impact of the change will be relatively small. The change from $175 million to $500 million would increase the percent of total credit union and bank assets under the threshold from 3.5% today to still only 8.6%.