Regulation: A ‘Crisis Of Creeping Complexity’

Wright-Patt CEO Doug Fecher wants credit unions to be aware that new rules from the Consumer Financial Protection Bureau could indeed affect them.


The Consumer Financial Protection Bureau, which has yet to officially implement any new regulatory change, is grappling with how to improve lending rules to benefit both the borrowers and the lenders, especially smaller lenders.

While the CFPB has no authority to enforce any new rules or examine smaller banks and credit unions, the rules that it writes can certainly affect institutions of any size.

Wright-Patt Credit Union ($2.4B, Fairborn, OH) CEO Doug Fecher called for the CFBP to ensure that credit unions have “no impact” from CFPB’s plans to tighten lending disclosure rules during “Credit Crunch: Is the CFPB Restricting Consumer Access to Credit” hearing before the House TARP and Financial Services subcommittee July 24.

Fecher was speaking on behalf of the Credit Union National Association, which represents about 90% of the nation’s 7,200 credit unions.
“Credit unions face a crisis of creeping complexity with respect to regulatory burden,” Fecher said. “It is not just one new law or revised regulation that challenges credit unions, but the cumulative effect of all regulatory changes.”

To help credit unions better manage the complicated regulatory landscape, is featuring content related to compliance issues as part of our ongoing monthly Theme Week content. We’ll have a question-and-answer feature from the compliance officer from Rocky Mountain Credit Union ($131.1M, Helena, MT), a detailed look a new mortgage and credit card disclosure forms and an indepth feature on whether or not to outsource your compliance expertise.

During that same July 24 hearing, CFPB director Richard Cordray called credit unions’ cooperative business model a “positive business model that did not in any way contribute to the financial crisis in this country.” However, many credit unions fear that proposed regulations on disclosures that aim to make documents easier-to-understand for consumers, will also result in hardships for compliance officers, especially at smaller credit unions, that must invest time in understanding and abiding by them.



Aug. 6, 2012



No comments have been posted yet. Be the first one.