15 years on, Dodd-Frank still weighs down credit unions, Nussle warns lawmakers
In the 15 years since the Dodd-Frank Act took effect, credit unions have experienced significant and ongoing overregulation. Ahead of the House Financial Services Committee’s Tuesday hearing to mark the legislation’s anniversary, America’s Credit Unions President/CEO Jim Nussle urged Congress to consider several reforms.
“The significant impact of Dodd-Frank on credit unions cannot be overstated. From the Durbin Amendment to the creation of a new regulatory regime, credit unions have endured heavy burdens in the wake of the passage of Dodd-Frank,” Nussle wrote. “In particular, the implementation of a number of Dodd-Frank’s provisions by the CFPB has proven burdensome and, in many cases, antithetical to the Bureau’s original purpose of leveling the playing field for community financial institutions.”
This includes accelerating the consolidation of the credit union industry by requiring compliance with regulations intended for larger, unregulated bad actors; subjecting credit unions to a “costly and arbitrary” $10-billion regulatory threshold that detrimentally impacts their ability to serve members; and arbitrarily reducing operating income with limitations on interchange fees to the benefit of big-box retailers and merchants.
Needed reforms include:
- Changing CFPB leadership to a bipartisan commission;
- Increasing Congressional oversight of the CFPB by subjecting it to the appropriations process;
- Providing clear unfair, deceptive, or abusive acts or practices (UDAAP) rules of the road;
- Expanding and clarifying credit union exemptions from CFPB rulemakings;
- Improving the use of cost-benefit analyses and small business review panels;
- Reforming the Civil Investigative Demand (CID) process; and
- Repealing the Durbin Amendment.
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