The National Association of Federally Insured Credit Unions (NAFCU) backs the findings of recent reports released by the Office of Financial Research (OFR) and the Treasury Department that expressed concerns about over-regulation of asset managers, particularly credit unions.
The OFR report criticized banking regulators’ use of asset-size thresholds to determine a financial institution’s systemic risk. The report calls for reforms to the Dodd-Frank Act to allow regulators to look at multiple factors beyond size to determine the impact an institution would have on the financial system if it failed.
“Some large banks may not be systemically important; and conversely, some smaller banks might be,” the report states. “Bank size alone does not equate to risks a firm may pose to financial stability.”
NAFCU agrees that size does not directly correlate to risk. Further, NAFCU contends that credit unions should not fall under the Consumer Financial Protection Bureau’s regulatory authority since they did not spur the financial crisis.
Additionally, the Treasury Department released a report that recommends delaying the implementation of the Department of Labor’s (DOL) fiduciary rule until its impact is further evaluated. The fiduciary rule affects how financial advisers advise clients on retirement savings. NAFCU believes the fiduciary rule should be tossed out, or should not apply to credit unions.
The Treasury’s report also says the Department of Housing and Urban Development should reconsider its disparate impact rule as it relates to the Fair Housing Act. This means the lender’s actions can be seen as discriminatory, even if that wasn’t the intention. NAFCU supports fair lending, but cautions against overly burdensome regulations.