Linda Sweet, a witness for the National Association of Federal Credit Unions, testified before Congress on Tuesday that the regulatory burden has contributed to the reduced number of credit unions.
Sweet said more than 800 credit unions have closed since 2009, pointing to a NAFCU survey in which 70 percent of credit unions indicated they have to ask non-compliance staff to take on compliance duties as a result of the new regulation.
She also said the NCUA examination process went from “three to five days of helpful input and teamwork” to a process that “now requires months of preparation.”
“It seems that these exams are taking longer due to the large number and complexity of regulations and not because of the increasing size or complexity of the credit union,” she said.
Sweet urged lawmakers to ease the regulatory burden on credit unions, touting NAFCU’s five-point relief plan and legislation that has been incorporated, including the Regulatory Relief for Credit Unions Act introduced by Rep. Gary Miller (R-Calif.).
“While many of the rules placed on credit unions are time-consuming and burdensome, no single regulation is creating the unbearable regulatory overburden that is leading to industry consolidation, rather it is the tidal wave of new rules and regulations coming from multiple regulators—often with little or no coordination between them,” Sweet said. “The burden is compounded as old and outdated regulations are not being removed or modernized at the same pace. This regulatory tsunami has hampered all credit unions ability to serve their members and any relief effort should not attempt to split the industry.”