State CU System Leaders Testify on Capitol Hill
July 24, 2012 - NASCUS members were in Washington, D.C. this week testifying before Congress on consumer protection and preemption issues.
On behalf of the Conference of State Bank Supervisors (CSBS), Nebraska Director of Banking John Munn testified on July 24 before the House Financial Services Committee’s Subcommittee on Financial Institutions and Consumer Credit. Also on July 24, on behalf of the Credit Union National Association (CUNA), NASCUS Credit Union Advisory Council member Doug Fecher of Wright-Patt CU testified before the House Financial Services Subcommittee on Oversight and Government Reform.
At the hearing "Examining Consumer Credit Access Concerns, New Products and Federal Regulations," Munn told the Subcommittee he has serious concerns with proposed legislation (H.R. 1909 and H.R. 6139) that would establish a federal charter for non-depository consumer credit industries, including payday lenders, check cashers and issuers of stored value cards.
“As state regulators, we benefit from our proximity to the consumer transaction and to the communities served by the financial services providers,” Munn said. “We hear first-hand about the regulatory burdens, and we see up close the consequences of bad actors. These bills take this perspective out of the picture, to the detriment of the marketplace and of consumers.” Munn also stressed the importance of ensuring confidentiality between state and federal regulatory agencies as the array of regulatory bodies would widen with this legislation. Also testifying at the hearing were representatives from the Office of the Comptroller of the Currency (OCC), Cash America International, the National Pawnbrokers Association, Competitive Enterprise Institute, Center for Responsible Lending and Bretton Woods, Inc.
At the hearing entitled "Credit Crunch: Is the Consumer Financial Protection Bureau (CFPB) Restricting Consumer Access to Credit?" Fecher, president/CEO of Wright-Patt CU, Fairborn, Ohio, told members of the Subcommittee that the burden of complying with changing and increasing regulatory requirements continues to create issues for credit unions and other small institutions. "Credit unions face a crisis of creeping complexity with respect to regulatory burden. It is not just one new law or revised regulation that challenges credit unions, but the cumulative effect of all regulatory changes," said Fecher. Testifying with Fecher were CFPB Director Richard Cordray, Cato Institute Director of Financial Regulation Studies Mark Calabria, Consumer Bankers Association Executive Vice President Steven Zeisel and Center for Responsible Lending President Michael Calhoun.