As a member-owned cooperative, a credit union’s success is literally tied to the financial health of the people who walk through its doors every single day.
This symbiotic structure is why credit unions remain the safest and most consumer-friendly option in banking. It’s also a clear example of why you didn’t see the government bailing out credit unions after the 2008 financial crash, unlike the big banks.
Unfortunately, the federal government seems to have forgotten who was responsible for that crisis.
Regulations written in Washington and created to police the bad behavior of Wall Street have inexplicably been slapped onto credit unions, too.
These massive one-size-fits-all regulations — again, crafted for the largest financial institutions in the world — have forced the credit union, with limited resources as a not-for-profit financial institution, to increase loan rates to members, reduce dividends, reduce staff and not expand into new products and services for our members. In addition, I conservatively estimate that the credit union spends 20 percent of our staff time keeping up with all of the changing regulations and updating our policies and procedures. This equates to over $100,000 a year being allocated to regulation. Time and money that would be better spent serving our members.
So now, I’m asking the members of Congress and our Montana congressional candidates for help in untangling us from the rules aimed at the big Wall Street banks, which actually harm, not protect, my members.
It’s simply not fair to treat behemoth financial institutions such as Wells Fargo the same way as my credit union, with 10 staff members and $25.5M in assets. How can the big banks collapse the economy and emerge in even better shape than the credit union industry that safeguarded its members all along?
Congress was not wrong to establish the Consumer Financial Protection Bureau (CFPB). It is common sense to protect consumers from the irresponsible behavior we saw from the big banks.
It was not common sense, however, for the Consumer Financial Protection Bureau to blanket all financial institutions with the exact same regulations, regardless of size.
It was not common sense for this agency, headed by a single director with an agenda, to both overreach with its regulations and blatantly neglect its clear legal authority to exempt small financial institutions when rules were inappropriate for them.
And it is not common sense for my members, who are middle-class consumers and members of this community to pay for the mistakes of the big banks.
Something must be done.
As the 115th Congress assembles, we need support from our elected officials for legislation that will rectify these problems.
Eddie Black is the CEO and president of Vocal Credit Union in Helena and works closely with the volunteer board of directors in establishing the strategic vision for the credit while leading the organization in providing critical financial services for its members in the communities of Helena, Boulder and Townsend.