Credit unions are experiencing an unprecedented battle on non-interest income, America’s Credit Unions Chief Advocacy Officer Carrie Hunt wrote to NCUA Chairman Todd Harper and CFPB Director Rohit Chopra Thursday, stressing these challenges stem from the actions of both agencies.
“These challenges will result in a change to the credit union business model, making it more difficult and costly for these smaller, community-based institutions to continue serving their consumer-members across the country,” Hunt wrote. “If unnecessary regulation continues to make it more difficult for smaller financial institutions to operate, we will continue to see an increasing rate of consolidation, resulting in fewer banking options, less competition, and higher prices.”
Hunt noted the CFPB’s recent actions to simultaneously reduce credit union income while simultaneously increasing regulatory burdens and compliance costs act “as a one-two punch to the operational realities of credit unions.”
These include actions targeting credit card late fees, nonsufficient funds (NSF) fees, and overdraft fees.
“The decreased fee income associated with these regulations—combined with increased regulatory burdens simultaneously implemented by the Bureau—have put significant pressure on the ability of credit unions to remain competitive and offer crucial programs and services to their members.”
Hunt also shared continued concerns with NCUA’s recent revisions to its call report requiring credit unions above $1 billion in assets to report revenue from overdraft and NSF fees, as well as NCUA’s continuing budgetary increase each year.
