SEATTLE–Credit unions were cautioned by a member of Congress that they need to move now to get ahead of a Dodd-Frank requirement that could come back to haunt in a few years.
Rep. Denny Heck (R-WA) told CUNA’s America’s Credit Union Conference that he is concerned over a “prospective issue” that could develop as the government gets around to executing on a Dodd-Frank Act requirement around the collection of small business loan data.
Heck, who began his career working at Columbia Credit Union and who has been the owner of several businesses, said that what he fears is the data collection effort will turn into another Home Mortgage Disclosure Act (HMDA) scenario. HMDA data collection, noted Heck, should involve the collection of a few questions. Instead, it has become another onerous piece of compliance, he said.
“I come from the private sector, and I can’t even begin to wrap my head around what a similar report will look like for small business loans,” said Heck. “To me, it’s going to be overwhelming, and will be a deterrent to making loans. We need to get out in front of this. How we don’t want this to play out is to get the CFPB involved and have them come out with a thick set of complex regulations. I want us to impact this on the front end of their deliberations, so we don’t have to play compromise and end up with half a loaf.”
On a separate issue, Heck said he will also continue to press for opening banking and credit union services to marijuana businesses, which have been legalized in his home state of Washington, and now numerous other states.
“Regardless of what you think of marijuana or how it should be regulated, this is real and happening,” said Heck.
Heck noted that just a week prior to his remarks a young man studying to be a police officer and working security at a marijuana business in Colorado was shot and killed during a robbery. Marijuana businesses are primarily all-cash operations, making them dangerous for the people who work in them. Heck predicted that other shootings will occur until marijuana businesses have access to the financial services industry.
“We need to allow the use of credit and debit cards and get cash out of the system,” said Heck.
Heck added that the good news in Congress is that a majority in the House and Senate support his position.
“The bad news is that at least in the House the leadership has tightened its grip on this issue and is no longer allowing votes on it,” said Heck.