As I recently wrote to our two U.S. Senators, the burden on small credit unions of complying with laws, rules and regulations is sometimes overwhelming. In many (perhaps most) cases, this regulatory burden provides no benefits to our members.
On January 1, 2011 we had to comply with two new regulatory requirements. The first change was for our annual “Privacy Notices” where we provide members with information about information sharing. A “Privacy Notice” has been required for several years and must be given on request, when an account is opened and sent annually to all members. We send the notice with the December31 statements. In the past, this notice was on a 1/4 sheet insert. In our case, we are not sharing information such that the member has any “right” to opt out of such sharing. With the new requirements to have bigger print and lots of “white space”, our notices are two sides of a full 8 1/2 x 11″ sheet. This is more paper, more ink to print and more postage for a few members with several pages on the statement. More work, more cost — and no benefit!
The second change that went into effect January 1 was the “Risk based Pricing Notice”. Since we have different loan interest rates based on the member’s credit score, we are required to give this full page (big print, lots of “white space”) notice to eeryine who does not get the lowest rate. Another piece of paper, ink, and work/cost! This information is already available to borrowers. Our pricing is fully disclosed on our web site and is available to members upon request.
Multiply these two requirements many, many times over and you get an idea of the regulatory burden on small credit unions.