The House Financial Services Subcommittee on Oversight and Investigations heard testimony from various financial industry participants on Thursday regarding the impact of Dodd-Frank on the community banks.
Lynette Smith, the CEO of the Virginia-based Washington Gas Light Federal Credit Union, said that the compliance burden brought on by Dodd-Frank has been challenging for her credit union and that the institution would be forced to hire a full-time compliance officer to keep current with regulations, Credit Union Times reports.
Additionally, Smith said that increasing compliance costs could possibly force the institution to increase member fees.
“Credit unions have always been a lender of last resort,” Smith said, according to Credit Union Times. “When I have members come to my office and I know they have no other place to go, I can provide them a loan in an hour…I want to continue to do that. The next day, they’re bringing me cucumbers from their garden. That’s grassroots, that’s what credit unions do.”
Deputy Director Raj Date of the Consumer Financial Protection Bureau also testified and sought to address concerns related to a growing compliance burden.
“We want to minimize compliance burden to the extent possible,” Date said. “We want to craft…rule[s] that [work] for the market throughout the credit cycle, but we also want to be mindful of just how fragile and risk-averse the market seems to be today.”