Regulatory burden has a significant negative impact on the ability of credit unions to respond to the needs of our members. Dodd-Frank has over-regulated credit unions by placing them into the same category as the big banks even though they had nothing to do with the financial crisis.
This sent credit union compliance costs through the roof and limited our ability to what we do best—support our communities. But it’s also worth noting who foots that bill since credit unions are not-for-profit financial cooperatives…our members!
By taking steps to right-size regulation with a targeted, common sense approach, this bill is helping consumers who depend on their credit union for their financial needs. The commonsense regulation progress included in the legislation will:
- Improve consumer access to mortgage credit;
- Provide regulatory relief for small financial institutions (like us!) and protect consumer access to credit;
- Provide specific protections for veterans, consumers and homeowners, and
- Tailor regulations for different types of financial institutions to better reflect their business models (like not for profit financial cooperatives!).
In particular, there is specific language that addresses credit union regulatory relief, by granting credit unions parity with banks by classifying residential loans for one-to-four unit, non-owner occupied property as real estate loans. It is common sense regulatory relief that these loans are classified consistently whether made by a bank or a credit union. This change will simplify the process and provide more options for consumers!
Overall, this legislation provides much-needed focus on Main Street. It will provide relief by rolling back unnecessary regulations on financial institutions – such as credit unions – that did not cause our country’s financial crisis. It is a win-win for consumers, as it maintains protections against those who created the problems in the first place, while ensuring smaller financial institutions like credit unions have regulations in place that make sense and don’t impede our ability to serve our members.
Here’s where YOU come in!
Encourage your representatives to put their support behind this bill — Feel free to add any personal stories of how regulatory burden has affected how you interact with the credit union or inhibited your ability for quicker or cheaper financial resolutions.
Resources:
Press Release from Senate Banking Committee
Common Sense Regulations Website
Other issues that affect credit unions
