WASHINGTON (3/21/12)--Rep. Shelley Moore Capito (R-W.Va.) told attendees of the Credit Union National Association's (CUNA) 2012 Governmental Affairs Conference (GAC) that she will remember their best interests in Washington--particularly when it comes to the burdens of regulation.
Capito noted her recent participation, as a member of the House subcommittee on financial institutions and consumer credit, in a Texas field hearing that specifically asked financial institutions to report the impact new financial regulations are having on their ability to extend credit and stimulate job growth.
She also registered her concerns that a provision in the Dodd-Frank Act that was designed to help credit unions and other small debit card issuer was failing to do so. She said the exemption to exempt financial institutions under $10 billion in assets, such as most credit unions, from the debit card interchange fee cap may not work.
"The Federal Reserve did reshape interchange, but it is still out there as an issue," Capito said. "You are not sure exactly what impact it will have on your individual credit unions. It could impact the services you provide…
"My cautionary flag is that we don't want to push people from low-income brackets out of your credit unions because that can't afford services as a result of any fees you were forced to tack on because of interchange."
A trend that Capito said she finds troubling is the financial institution compliance officers are among the fast growing job positions.
"If you're hiring a compliance officer, where are you diverting your resources from? From your members," Moore Capito said. "You're unable to loan more. You're unable to offer more services. You're unable to do more outreach. You have to do less recruitment because you're worried that the regulator will clip your wings. I think that's contributing to our stagnant economy right now."
Moore Capito said during her field hearings one credit union executive told her that it seemed credit unions had been forgotten during the formation of regulatory policy.
"I'm here to pledge to you that we will not forget about credit unions as we move our discussions through Congress," she said.
Moore Capito thanked CUNA for its support of the Financial Institutions Examination Fairness and Reform Act, a bill she is co-sponsoring with Rep. Carolyn Maloney (D-N.Y.), and a bipartisan group of more than 100 lawmakers. The bill would give financial institutions the right to appeal regulatory exams to an independent ombudsman.
Capito said the bill will eliminate the "disconnect" between financial institutions and regulators, and lend more timeliness to the exam process.
"I think it will provide more certainty for financial institution in providing services and making decisions when regulators make their recommendations," she said.