WASHINGTON (7/24/12)--The burden of complying with ever-changing and ever-increasing regulatory requirements continues to create issues for credit unions and other small institutions, Doug Fecher, president/CEO of Wright-Patt CU, Fairborn, Ohio, will tell members of the House Oversight and Government Reform Committee financial services subcommittee today.
Fecher, who is testifying on behalf of the Credit Union National Association, is scheduled to to speak at a 10 a.m. (ET) hearing entitled "Credit Crunch: Is the Consumer Financial Protection Bureau (CFPB) Restricting Consumer Access to Credit?"
In prepared testimony, Fecher will note that credit unions have been battered by the volume of regulatory changes and by concerns sparked by the financial crisis. Credit unions are bracing for the next wave of rules created by the Dodd-Frank Wall Street Reform Act.
Regulatory compliance costs reduce credit unions' net income, and while these costs will not drive credit unions into immediate insolvency, they will reduce the protective cushion provided by capital, leaving credit unions less resilient during the next big financial shock, Fecher will note.
"Credit unions face a crisis of creeping complexity with respect to regulatory burden. This burden will, in my opinion, have a negative impact on credit unions' ability to extend credit to members at reasonable costs. It is not just one new law or revised regulation that challenges credit unions, but the cumulative effect of all regulatory changes," Fecher's testimony will say.
Also scheduled to testify this morning are CFPB Director Richard Cordray, Cato Institute Director of Financial Regulation Studies Mark Calabria, Consumer Bankers Association Executive Vice President Steven Zeisel, and Center for Responsible Lending President Michael Calhoun.