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Credit unions tell Congress that regs are overwhelming

MBL Congressional Hearing panel

Credit unions, along with community banks and industry executives, testified before a House subcommittee on "Rising Regulatory Compliance Costs and Their Impact on the Health of Small Financial Institutions." Terry West, VyStar CU CEO told the subcommittee that his Jacksonville based credit union is being burdened by regulations. He said his credit union originates many international wire transfers and to comply will have to revamp forms, put new processes in place and train staff. All things that take time and money away from the credit union members.

“A major part of VyStar’s membership is military personnel, civil service personnel and their family members who will want to initiate international wire transfers from their accounts. A credit union can be very small and serve, for instance, an immigrant population who will also want such a service,” West was quoted by the CU Times from the hearing.

The CFPB is looking at a proposal that if a credit union makes 25 or fewer international remittances a year, it would not be considered a “remittance transfer provider.” The Times quoted West as saying that "credit unions were surprised at the very low number proposed, which would only help a very, very small number of institutions."

Ed Templeton, president/CEO of SRP FCU of North Augusta, S.C. testified that placing new regulations on top of old outdated regulations overwhelm small financial institutions. Templeton is quoted in the CU Times article as saying "a 2011 survey that showed almost two-thirds of credit unions said they have increased or were considering increasing fees on products or services due to recent regulatory changes."

During their testimony, West and Templeton both said they supported HR 3461, the Financial Institutions Examination Fairness and Reform Act. Alabama and Florida currently have 18 representatives who are co-sponsoring the legislation. To read the full CU Times article, click here.