Nussle outlines regulatory overreach affecting credit unions with Congress
Credit unions weighed in with concerns about regulatory overreach in advance of the House Financial Services Subcommittee on Financial Institutions Hearing Tuesday. Entitled: “Regulatory Overreach: The Price Tag on American Prosperity,” America’s Credit Unions President/CEO Jim Nussle took the opportunity to share a letter with the subcommittee on a specific issue with the CFPB’s oversight of credit unions.
“For too long, community financial institutions have been under a regulatory onslaught that has forced many to close or merge,” wrote Nussle. “(Credit unions’) member-owned cooperative structure makes credit unions the original consumer protectors. Still, credit unions find themselves subject to the rules, burdens, and costs associated with being regulated by the CFPB.”
Citing the increased “burdens on community lenders and rais(ing) the cost of small business borrowing,” Nussle reiterated support for the 1071 Repeal to Protect Small Business Lending Act (H.R. 976).
Additionally, he shared concerns over the bureau’s overdraft rule, which Congress recently voted to nullify, and its “seriously detrimental impacts to credit unions through increased consolidation, reduced ability to serve underserved areas, and reduced relationship banking as well as removing the stepping-stone to financial inclusion that overdraft protection often represents.”
In his letter, Nussle offered comments on several pieces of legislation that were tied to the hearing, including:
- The Taking Account of Institutions with Low Operation Risk (TAILOR) Act of 2025, requiring that rules promulgated by regulators be tailored to fit financial institutions’ business models and risk profiles;
- The Banking Regulator Accountability Act, to create an equitable reporting structure for regulators to convey reports to Congress;
- The CAMELS Rating Modernization Act of 2025, which would amend the Federal Financial Institutions Examination Council’s CAMELS rating system to reduce subjectivity; and
- The Supervisory Modifications for Appropriate Risk-based Testing (SMART) Act, to streamline examination requirements for well-capitalized financial institutions.
Nussle also noted the need to create parity with examination cycles for banks insured by the FDIC established by this legislation, in connection with the Tailored Regulatory Updates for Supervisory Testing (TRUST) Act of 2025.