Credit unions, owned by their members, already have strong incentives to treat consumers well, but they face a crushing "crisis of creeping complexity" under a steady accumulation of regulatory requirements, Credit Union National Association (CUNA) President/CEO Bill Cheney testified before a House subcommittee Wednesday. In opening statements to the hearing, subcommittee member after member voiced concerns about one of those burdens--the interchange fee regulations contained in the Dodd-Frank Act.
Cheney noted for the panel of federal lawmakers that as credit unions are not-for-profit financial cooperatives, members are the ones who receive the benefit of ownership, through reduced fees, lower interest costs, and higher rates on savings.
"Every dollar that a credit union spends complying with an unnecessary or overly burdensome regulation is a dollar that is not used to benefit the credit union's membership," Cheney stated.
He warned that the increasing regulatory requirements pursuant to Dodd-Frank and other government initiatives--called by some the "creeping crisis of complexity"--is a major driver behind current credit union consolidations, making it impossible for smaller credit unions to exist.
He added that credit unions are concerned that the increasing regulatory burdens also stifle innovation.
The CUNA leader also highlighted two key areas of the Dodd-Frank law, which he termed "very significant" to credit unions.