Approximately $73 per member per year on average.

That’s how much the Consumer Financial Protection Bureau’s regulation burdens cost Clark County Credit Union during the 2015 to 2016 period.

Matt Kershaw, CEO of Clark County Credit Union, unraveled the aftermath of his own credit union since the CFPB enacted an onslaught of regulations after the crisis.

Kershaw gave a real example and explanation to a problem that CFPB Director Richard Cordray says doesn’t exist.

During one his most recent speeches, Cordray stated, “Some doomsayers sound a frequent refrain that new regulations are killing the banks and choking off access to credit.”

“On the contrary, these common-sense rules of the road are promoting access to more responsible and safer credit. Banks have been consistently profitable and smaller institutions like community banks and credit unions have grown their share of the mortgage market in particular,” he continued.

Kershaw didn’t deny that credit unions have grown since the crisis. But, this doesn’t means it is proof for the CFPB that their regulations are not damaging the industry.

For example, Kershaw said they’ve been waiting for the CFPB to issue their overdraft ruling.

“We don’t have an overdraft program right now for our members, but it is something that they want,” he said.  “It helps keep them from going to a payday lender or something like that. But, we don’t want to institute a program that the CFPB could say you can’t do that anymore.”

Kershaw noted that the CFPB said it’s going to do something on payday lending but hasn’t yet. And as a result, the credit union is looking at this program and wondering how to do that in the long run if the CFPB is going to announce changes on it.

While this one thing is not necessarily a huge revenue producer, he stated that it is a service to help members manage their finances better.

And this is only one example that Kershaw explained.

“The way they have treated us is to say ‘we are going to give you the same treatment as every other bank, whether it’s a trillion dollar bank or Bank of America, you will have the same rules to follow,’” he said. “So, we are going, well, ‘How do we act?’ That’s been hard for us.”

Back in 2015, Clark County Credit Union conducted a study to finally put into numbers the strains caused by the CFPB’s regulations.

As noted previously, CFPB regulation cost the credit union $73 per member oer year on average during the 2015 to 2016 period.

During that same period, the credit union performed well enough as a non-profit cooperative to return a $3 million bonus dividend to its members. (For more information on how the dividends work, check here)

So yes Director Cordray, you are right. Credit unions are doing okay. At least they did if you don’t look further into the data.  

Clark County Credit Union’s study went a step further and explained that its member dividend would have been nearly double had the CFPB not caused it so much expense.

The credit union also noted that the burdens of over-the-top compliance was a factor in limiting the volume of home mortgage lending it was able to accomplish due to the slowdown in the process.

“We could’ve provided other services if we didn’t have to worry about our compliance burden,” said Kershaw.

Kershaw also gave an inside look at another persuasive argument Corday’s made on the success of credit unions.

Toward the end of last year, Cordray touted the growth of mortgage originations for credit unions in a speech, stating that credit unions originated 39% more home purchase mortgages in the first nine months of 2015 than they did for the same period of 2014.

Cordray continued, “That is good news for you and for consumers. It means more opportunity for more consumers, and a wider path to the American dream in a mortgage market made stronger by the changes we made.”

“Many credit unions have focused on the compliance burdens of the new rules. But they have overlooked the positive benefits of the rules. A safer mortgage market that does not allow ‘no-doc’ loans, or loans that can be underwritten over misleading teaser rates, is a market that presents more favorable ground for responsible lenders like credit unions,” he said.

While the market is a lot safer than it was during the crisis, it doesn’t denote the “you can thank me later” comment Cordray just gave to credit unions.

I guess credit unions owe him one now even though Kershaw explained that competition between credit unions around their size (smaller and medium-sized companies) has disappeared.

Though there has been consolidation before the regulation, he said the consolidation has happened more rapidly with these smaller organizations due to the regulation.

“If you look at the ones under $100 million, they’ve been dropping a lot faster and more quickly as increased regulations have happened,” said Kershaw. “Overall, as an industry, the bigger credit unions get bigger but the smaller ones are moving out.”

He added that community banks are even more impacted, as they are shrinking dramatically faster.

“When it comes down to it, the people that are the most responsive are the smaller medium sized companies, whether credit unions or community banks, because they know (their members),” he said. “They can tailor programs for them.”

“We want to be responsive to our members. We know who in the end is the true owner, and that’s our membership. If you lose that, we just become a nameless or faceless organization,” said Kershaw.  

The CFPB, as noted in speeches linked above, has recognized that the credit unions didn’t cause the crisis. But this defense that Cordray continues to vocalize on the strengths and benefits that regulations have brought to credit unions doesn’t add up. Clark County Credit Union did the math.