WASHINGTON—The impact of Dodd-Frank on credit unions and community banks was addressed during the House Financial Services Committee hearing Wednesday examining the Financial CHOICE Act.
CUToday.info has additional coverage here.
Subcommittee on Housing and Insurance Chairman Sean Duffy (R-WI), and panel member Ed Royce (R-CA), both noted the negative impact the Dodd-Frank Act has had on community financial institutions. Duffy said credit unions were closing in his community and that the Dodd-Frank Act seemed to be protecting the big banks over smaller institutions. Royce echoed that assessment, noting the heavy burdens imposed by the Dodd-Frank Act have put smaller institutions at a disadvantage, noted NAFCU.
Hearing witness John Allison, former president and CEO of the Cato Institute, agreed. He said CEOs of smaller institutions have to spend their time focusing on regulation rather than helping those in their community. Royce added that today's environment is also putting smaller institutions at risk of being bought by bigger institutions. Allison added that Dodd-Frank regulations have made it much harder for new community banks and credit unions to open, reported NAFCU.
Many other members of the committee, including Reps. Keith Rothfus (R-PA), Scott Tipton (R-CO), Bruce Poliquin (R-ME), Mia Love (R-UT) and Tom Emmer (R-MN), also noted the negative impact the Dodd-Frank Act has had on community financial institutions.
Discussing components within the CHOICE Act discussion draft, hearing witness Norbert Michel, senior research fellow of financial regulations and monetary policy at The Heritage Foundation, said in his opening statement that the Durbin interchange amendment should be repealed. A joint letter supporting the discussion draft's language to repeal the Durbin amendment, signed by NAFCU and other trade association members of the Electronic Payments Coalition, was issued into the hearing's record, NAFCU reported.
CUNA reported that Rep. Brad Sherman (D-CA) said he was in favor of the committee taking up many of the provisions in the CHOICE Act as individual bills. He named several bills, including the Mortgage Choice Act, that he said would “pass through committee overwhelmingly” if taken up individually.
Rep. Tipton questioned the burdens of the Dodd-Frank Act, saying those burdens meant community financial institutions are now forced to ask how they can comply, rather than ask how they can better serve consumers, CUNA reported.
Reports indicate the House Financial Services Committee intends to mark-up the Financial CHOICE Act on Tuesday.