CUNA study finds cost of regulatory burden to Maine CUs in 2017 was $40 million

February 22, 2018

Just in time for the largest-ever Maine CU Delegation's visit to Washington, as part of the GAC, the Credit Union National Association (CUNA), has released an updated regulatory burden study.  In 2017, the study found that the cost of regulatory burden to Maine CUs totaled $40 million.  That breaks down to an average of more than $700,000 that Maine CUs spend on regulatory burden, with the cost of regulations to an average member household estimated at $124.00.  "The burden of regulations and complying with all of those regulations continues to be significant to Maine credit unions, especially when many of these regulations are a result of actions caused by big banks, not credit unions.  This is information we will be sharing with our Congressional Delegation, because the time spent on regulatory compliance impacts the ability of credit unions to serve members in other ways," stated Todd Mason, President of the Maine Credit Union League.

Mike Schenk, VP of Research and Analysis with CUNA, compiled and analyzed the study and data.  "Credit union regulatory burden costs have increased to an 'Elevated New Normal', totaling an estimated $6.1 billion in CUNA’s updated study.  Overall, costs have increased by $800 million over the past two years.  The substantial increase in credit union regulatory burden dollar costs translate to a 15.1% increase, far exceeding the 2.8% inflation rate over the two-year period."

Elise Baldacci, Vice President of Governmental Affairs for your League, said, "Regulatory burden is the number one issue facing credit unions today.  This study reinforces how much of an issue this is and what it means for our credit unions.  More time spent on compliance means less time spent helping members and the communities."

According to Schenk, "One staff member’s time for every five employees is spent on regulatory compliance.  Regulatory burden has a disproportionate impact on smaller credit unions: The typical small credit union, with less than $115 million in total assets, incurs costs equal to 0.69% of assets – one and one-half times greater than the 0.46% median cost at large credit unions (i.e., those with $1 billion or more in total assets."

The study revealed the top regulations nationally with the biggest regulatory cost impacts:

  1. Electronic Funds Transfer (Reg E) - $589 million
  2. Expedited Funds Availability/Check 21 (Reg CC) - $545 million
  3. Bank Secrecy Act/AML - $530 million
  4. Prudential Regulation - $501 million
  5. TILA/RESPA Integrated Disclosure - $497 million
  6. Truth in Lending (Reg Z) $490 million

Resources:

CUNA's Top Takeaways from Study

Regulatory Burden costs by state