Lending The Ticker

Here's how to stop credit unions from dying

More than 1,280 institutions gone in five years

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As the government plans for the year ahead, the National Association of Federal Credit Unions’ President and CEO Dan Berger wrote a letter to House and Senate leaders on NAFCU's top legislative priorities of 2016.

The letter details the pain points for credit unions that will be a top priority, along with the harsh reality of how regulation is negatively impacting credit unions.

“During the consideration of financial reform, NAFCU was concerned about the possibility of the overregulation of credit unions,” Berger wrote. “Unfortunately, many of our concerns about the increased regulatory burdens that credit unions would face have proven true.”

According to NAFCU, the number of credit unions continues to decline, dropping by more than 17% – that’s more than 1,280 institutions – since the second quarter of 2010.

And, they are most certainly not alone as new banks aren't exactly popping up to fill the void, either.

“We appreciate the ongoing focus on finding ways to cut back on regulatory burden for small lenders that did not contribute to the financial crisis and urge that this remain a priority for the remainder of the 114th Congress,” he said.

The three big housing related concerns that Berger stated are regulatory relief, housing finance reform ad Dodd-Frank guidance.

Here’s part of what the letter said needs to happen for credit unions in housing.

Push for regulatory relief:

In 2015, NAFCU put out a new five-point plan for credit union regulatory relief and a new “Top Ten” list of regulations and laws to be changed to provide regulatory relief.

NAFCU will continue its push for credit union regulatory relief in 2016 in Congress and at the regulatory agencies, including the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau.

Pursue clear Dodd-Frank Act guidance:  

NAFCU worked throughout the past year seeking clear, transparent guidance from regulators, including NCUA and CFPB, so credit unions have the information they need to ensure their operations are safe, sound and reflective of the spirit and letter of the law governing them. The association has been working toward this end in particular since enactment of the Dodd-Frank Act. Of special concern are those areas of the law – such as its call for a focus on unfair and deceptive acts and practices – that provide few or no specific directives for implementation and for which regulators have yet to provide specific guidance.

Ensure secondary mortgage market access for credit unions:

Preserving a government guarantee, maintaining unfettered access to the secondary market and ensuring fair pricing for credit unions based on loan quality rather than volume will remain a top legislative issue for NAFCU for 2016 as lawmakers continue deliberations on housing finance reform. On the regulatory front, NAFCU will continue to work to ensure that credit unions’ access to the secondary market is not hampered by regulatory actions, including those affecting the cost of working with Fannie Mae and Freddie Mac and GSE loan limits. It will also continue to push for equal access for credit unions to membership in the Federal Home Loan Banks. 

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