The National Association of Federal Credit Unions testified before Congress on Wednesday, urging regulators to ease the compliance burden on smaller financial institutions and to adopt a measure to increase transparency in the regulatory process.
“Challenges for credit unions do not only come from [the] Dodd-Frank Act and the Consumer Financial Protection Bureau, but also the National Credit Union Administration,” NAFCU Treasurer Ed Templeton, who is also the president and CEO of the South Carolina-based SRP Federal Credit Union, said. “Regulatory burden also comes from outdated laws on the books. Congress needs to pass legislation to relieve some of these heavy burdens from credit unions.”
Templeton urged the House Financial Institutions Subcommittee to adopt the Regulatory Accountability Act of 2011, which would ultimately simplify and enhance transparency and accountability in the regulatory process as well as ease the burden of regulation on credit unions.
Templeton said that while JPMorgan recently reported the need for 3,000 employees to ensure regulatory compliance, the burden will be much heavier for his credit union.
“My credit union will be subject to a number of the same regulations, but I have just two employees working on compliance issues,” Templeton said.
Templeton said that the increasing amount of red tape could swallow America’s smaller financial institutions.
“The greatest challenge facing many credit unions is the cumulative impact of the rapidly growing number of regulatory burdens in the wake of the financial crisis,” Templeton said. “While any single regulation may not be burdensome, the layering of new regulation on top of old and outdated regulation can completely overwhelm small financial service providers like credit unions.”