Recent regulatory actions have credit unions facing a “tidal wave” of burdens and restrictions, Afena Federal Credit Union President/CEO Karen Madry told the Senate Banking Committee in testimony Thursday. Madry testified on behalf of America’s Credit Unions for a hearing on financial services fees.
“The onslaught of new regulations and attacks on income sources is making it harder for smaller credit unions to survive,” Madry said. “We urge Congress and regulators to consider these challenges and do something before it is too late.”
Committee Chair Sen. Sherrod Brown, D-Ohio, said in response to her testimony, “I appreciate Ms. Madry, the way she runs her credit union and credit unions overwhelmingly in Ohio I see the same way, they explain to their members better, they keep a simple structure, they really aren’t the problem.”
Ranking member Sen. Tim Scott, R-S.C., urged members of the committee to support his resolution to nullify the CFPB’s rule to cap credit card late fees at $8, noting the rule would “cut off access to credit and stymie financial inclusion for the families that need it most.”
America’s Credit Unions strongly supports efforts to nullify the rule, and the House Financial Services Committee passed the resolution last month.
Madry also told the committee:
- Credit union fee income as a percentage of assets as at a 32-year low;
- The continued broad mislabeling of “junk fees” will cause credit unions to no longer be able to offer services and products to financially vulnerable communities;
- The CFPB’s proposed overdraft rule may undermine the ability of Afena and other smaller financial institutions to offer critical, needed services;
- CFPB’s credit card late fees rule will result in reduced credit card competition and less access to credit for vulnerable and underserved communities; and
- Uncertainty surrounding the abusiveness prong of Unfair or Deceptive Practices Act and the CFPB’s interpretation is a continuing source of concern.
Another member of America’s Credit Unions also testified Thursday at a CFPB/Department of Transportation hearing focused on credit card rewards programs.
America’s Credit Unions will continue to defend credit unions against regulatory overreach and fight for an environment that allows the industry to thrive.
