WASHINGTON (12/4/13, UPDATED: 10:25 A.M. ET)--"The crisis of creeping complexity with respect to regulatory burden is very real" for credit unions and other community-based financial institutions, Rose Bartolomucci, president/CEO of Towpath CU, a state-chartered, privately insured credit union in Akron, Ohio, said in testimony before members of the House Financial Services subcommittee on financial institutions and consumer credit at a just-started hearing this morning.
Bartolomucci is testifying on behalf of the Credit Union National Association and her credit union at a hearing entitled "Examining Regulatory Relief Proposals for Community Financial Institutions."
"Small credit unions are expected to comply as quickly and efficiently as large financial institutions with hoards of compliance officers. While the elimination of one duplicative rule or regulation may not seem like much, to a compliance officer in a credit union, it is. Without one more rule to comply with that employee can now spend time with a credit union member, helping to serve their financial needs," Bartolomucci said in written testimony.
A bill that would require the National Credit Union Administration, Consumer Financial Protection Bureau and other federal financial regulators to assess whether proposed rules are duplicative or inconsistent with other federal rules is one of today's agenda items.
The credit union CEO's testimony also commented on CUNA-supported legislation that would permit privately insured credit unions to join a Federal Home Loan Bank. "It has never seemed fair to our small institutions that some of the largest banks in the world, or insurance companies (which are not federally insured), or a foreign bank's U.S. subsidiary can borrow billions of dollars from the Federal Home Loan Bank System, but teachers in Ohio and Texas, firefighters in California, postal and county workers in Illinois and farmers in Indiana cannot...Can these privately insured credit unions engage in riskier activities than federally insured institutions? No. Is there a risk to the Federal Home Loan Bank System from this legislation? No...Will this change cause a significant number of credit unions to switch from federal to private insurance? No," Bartolomucci said.
Bartolomucci also opined on a CUNA-supported bill that would adjust the Consumer Financial Protection Bureau's rural designation to align with the definition used by the U.S. Department of Agriculture. "The concern CUNA has with the definition in the current rule is that many credit unions make loans to those in rural communities, but the credit union itself may not be based in those communities. If the definition of "rural" does not change, these institutions will be limited in the types of products they can offer their members in these areas," she said.
Watch News Now for more on the hearing.