In response to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray’s testimony before Congress Wednesday in which he defended the Bureau’s oversight of credit unions, National Association of Federal Credit Unions (NAFCU) President and CEO Dan Berger wrote Cordray a letter Thursday asking the Director to exempt credit unions from certain rulemakings.
Credit unions have long argued that the CFPB’s regulatory oversight intended for larger financial institutions is making financial products more expensive for consumers due to increased compliance costs, and in many cases putting credit unions out of business. The NAFCU reported earlier this week that since the second quarter of 2010, more than 1,350 federally-insured credit unions have been lost, 96 percent of which had below $100 million in assets.
“NAFCU would like to reiterate our longstanding position with the Bureau that regulatory burden is the top challenge facing credit unions of all sizes today,” Berger wrote in Thursday’s letter. “While smaller credit unions continue to disappear from this growing burden, all credit unions are finding the current environment challenging.”
The regulatory burden on all financial institutions is great, but proportionally more burdensome for smaller community banks and credit unions. This is why investments in channels and other areas that can enhance customer and member satisfaction, and deliver improvements in channels efficiencies, are so important. These efforts can help improve overall efficiencies and productivity, and are critical to achieving sustainable and profitable growth for these FIs, no matter the regulatory environment.
Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group
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