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Missouri Credit Union Leader Testifies Before U.S. Senate Regarding Regulatory Burden

U.S. Senators heard from one of Missouri's credit union leaders about the impact of regulatory burden on small financial institutions this week.  Dennis Pierce, CEO of CommunityAmerica Credit Union (Kansas City) and Chairman of the Board of Directors of the Credit Union National Association, testified in front of the U.S. Senate’s Committee on Banking, Housing and Urban Affairs on September 16.   

In his testimony, Pierce addressed the regulatory burden that credit unions in Missouri and across the country face - and the negative effects on credit union members..

“When considering regulatory burden, particularly as it relates to consumer financial protection, it is critical that policymakers understand that the incentive structure for credit unions and banks is different, and the regulatory structure should reflect those differences,” stated Pierce. “In short, credit union members really don’t need that much protection from the credit unions they own.”

Pierce was part of a panel including representatives from the National Association of Federal Credit Unions, American Bankers Association, and the Independent Community Bankers of America, among others. The panel followed testimony from regulators, including the National Credit Union Administration.

Pierce also explained that federal and state regulators impose the regulations, which have increased significantly in recent years. He attributed this largely in response to the financial crisis—and that natural person credit unions did not cause or contribute to this financial crisis. 

“These regulatory changes have made it more difficult for credit unions to serve their members and have provided credit union members with little, if any, benefit,” said Pierce. “And, in some cases, the regulations that have been imposed since the financial crisis have made things worse for credit union members.”

In both written and verbal testimony, Pierce described the “crisis of creeping complexity” of regulatory burden to the committee, stating that it’s any one regulation that presents an unmanageable situation for credit unions—it’s the accumulation of these requirements and the frequency that they change. This negatively impacts member service, as it diverts resources away from credit unions’ purpose and mission. 

“Since the beginning of the financial crisis, credit unions have been subject to more than 180 regulatory changes from at least 15 different Federal regulatory agencies,” stated  Pierce. 

Senators were urged to approve House-passed regulatory relief legislation and consider other measures and issues, such as the Data Security Act, Regulation D Study Act and the Credit Union Residential Loan Parity Act.  

Following testimony, Pierce answered questions from several senators regarding regulatory issues. 

You can read Pierce's full testimony here. 

Photo caption: Dennis Pierce testifies before the U.S. Senate regarding regulatory burdens.

Photo caption: Following the hearing, Dennis Pierce talks with U.S. Senator Jerry Moran (KS), who serves on the Senate Banking Committee.