Banks and Credit Unions Merge
Discussions of merging banks with credit unions, at least from a Congressional standpoint, appears being considered.
“It’s not necessary or reasonable for Congress to lump credit unions with the banking industry in seeking to shorten the compliance deadline for remaining Credit CARD Act requirements to this Dec. 1,” according to the National Association For Credit Unions.
Download a copy of the Credit Card Accountability Act here. The Amendments are here and here. If Congress claims to be helping consumers with their banking issues, they may want to reconsider. It appears the Credit Card Act has had a negative impact in part according to Anthony Demangone, senior compliance counsel.
Anthony Demangone said, ” The provision will likely lead to the end of credit unions issuing consolidated statements, the elimination of members’ ability to pick payment-due dates and an end of weekly and biweekly payment-due dates, Demangone noted. “Simply put, the 21-day issue is the largest single compliance burden the credit union industry has faced in the last decade”.
Demangone also testified that H.R. 2382, the Credit Card Interchange Fees Act of 2009, would have the net effect of severely limiting a revenue stream for credit unions that helps pay for the costs associated with data security breaches and compliance associated with increased regulation. “Arbitrarily limiting these fees will come at the expense of the consumer, the 90 million credit union members in America, and our nation’s smaller financial institutions,” he said.
H.R. 3639 and H.R. 2382 come at a time when many credit unions are already struggling with an ever-increasing regulatory burden, he noted. New amendments to Regulation Z, additional regulation on unfair or deceptive acts, and two Federal Reserve proposals on closed-end real estate lending and home equity lines of credit are just a few.
During Q&A, Demangone said credit unions are dealing with myriad operational issues in their efforts to meet current compliance deadlines. He added that many which rely on third-party providers for operational support are already hearing that those providers would be unable to comply with the rest of the Credit CARD Act by Dec. 1.
The proposed Consumer Financial Protection Agency also came up briefly, as Rep. Emanuel Cleaver, D-Mo., asked witnesses how CFPA could make life more difficult for institutions that are already complying with federal consumer protection laws.
Demangone responded that the CFPA would mean one more layer of regulation that will carry additional compliance costs, and those costs will ultimately be shouldered by the member-owners of each credit union.
H.R. 3639 is slated for mark-up Oct. 14 by the committee, according to a revised noticed published this morning.
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