ARLINGTON—Credit union members should brace for higher fees as their credit unions respond to growing compliance costs.
That’s among the findings in NAFCU's latest Economic & CU Monitor survey. The report found most credit unions expect to charge higher fees on certain business products and credit products to manage compliance costs incurred if the CFPB’s Small Business Regulatory Enforcement Fairness Act (SBREFA) outline of proposals related to Section 1071 of the Dodd-Frank Act are finalized.
Under section 1071, the CFPB is required to collect financial institutions' lending data related to small businesses.
“While NAFCU has urged the Bureau to exempt credit unions from a rulemaking on this issue as it will add significant regulatory burdens on small institutions, the outline of proposals does not include an explicit exemption,” the trade association said.
The CFPB is considering limiting both the extent of reporting by only requiring information about small businesses, including those that are women-owned or minority-owned, and the range of reportable credit products by excluding consumer credit used for business purposes, leases, trade credit.
Rise in Loan Demand
In addition, the vast majority of respondents to the Monitor survey indicated they expect a moderate or significant effect on compliance costs associated with these potential changes, NAFCU said.
In addition, NAFCU’s latest Credit Union Sentiment Index (CUSI) shows a rise in the loan demand component in September, but the index fell slightly overall. NAFCU's research team attributed the rise in loan demand entirely to first mortgage loans as most other major loan categories are slowing.