The credit union industry expressed on Tuesday support for a recent proposal by Sen. Elizabeth Warren (D-Mass.) to establish a two-tiered regulatory system that distinguishes between large and small financial institutions.
“As we have discussed, while many financial institutions reduced their lending to even their most loyal and longtime customers during the Great Recession, credit unions stood at the forefront, maintaining their level of lending, most particularly to our nation’s small businesses,” National Association of Federal Credit Unions President and CEO Fred Becker said. “Nevertheless, credit unions are facing a regulatory tidal wave. The plethora of regulations has, among other factors, resulted in the loss of over 700 credit unions in the past four years.”
Warren, who has been a staunch advocate of big-bank regulation, said during a Senate Banking Committee hearing last week that smaller institutions may be compromised by the hundreds of new Dodd-Frank rules.
“And so what I’m concerned about is that we now have a regulatory system for which many parts of it are neutral on its face, but the impact on smaller financial institutions that can’t afford to hire an army of lawyers to get and interpret these rules turns out to be crushing,” Warren said last week, according to The Hill.
NAFCU urged Warren to lead congressional efforts to establish a two-tiered regulatory system.
“We would like to express our strong support for a two-tiered regulatory system that would take into account the unique structure, activities and mission of the nation’s not-for-profit credit unions,” Becker said. “This two-tiered structure should separate the nation’s credit unions from the regulatory scheme directed toward the large Wall Street Banks and other entities whose activities led to the financial crisis.”