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Washington
Small CUs may be regulated out of business CEO warns
WASHINGTON (10/5/11)--Wright-Patt FCU President/CEO Doug Fecher on Tuesday said burdensome regulations are a central challenge to his credit union’s pro-consumer work, adding that it is “not an exaggeration to say our nation’s small, community-based financial institutions are exposed to a situation where they ultimately may be regulated out of business.” “This should concern us all,” he added. Fecher spoke before a Tuesday Senate Banking subcommittee on financial institutions hearing entitled "Consumer Protection and Middle Class Wealth Building in an Age of Growing Household Debt." Wright-Patt helps its members “achieve financial freedom for themselves and their families” by only making affordable loans that the members will be able to repay, by fully disclosing the terms of loans up front, and advising members on how they can increase their own savings, even while taking out a loan, Fecher said. “While credit unions would rather hire loan advisers and financial counselors to help consumers improve their financial situation, we’re instead hiring compliance offers to deal with the new rules,” he added. The Fairborn, Ohio-based credit union is the most regulated financial institution in its neighborhood, the CEO said. Fecher noted that it has been given “more than 160 new rules and regulations from some 27 different federal agencies” since 2008. Fecher said he hopes the Consumer Financial Protection Bureau “empowers credit unions to do their jobs of helping consumers make smart use of credit without creating even higher regulatory costs.” He also spoke in support of his fellow Ohioan and nominee for CFPB director, Richard Cordray, saying Cordray “has outstanding qualifications and understands the unique role credit unions play in the lives of consumers.” He noted that until a director is confirmed, unregulated entities like payday lenders and check cashers will go without regulation while credit unions and banks will be subject to regulation. Fecher also addressed the regulatory burden in early 2009 when he testified on the Credit Union National Association’s behalf before a House Financial Services subcommittee hearing.


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