Credit Unions Have a Regulatory Resource in the National Ombudsman
A Wall Street Journal editorial posed the question: "What do you do when you're a small company in Colorado, a federal regulator is after you, and it's hard to get anyone in Washington to answer your phone calls?"
My answer: You contact the Office of the National Ombudsman at the U.S. Small Business Administration.
At the Office of the National Ombudsman, we receive complaints and comments from small businesses, including credit unions, and we then liaise between them and federal agencies on their behalf. Although we are based in the SBA, we may assist businesses with regulatory concerns relating to over 35 federal agencies, including the NCUA, the Department of Treasury, the Department of Labor, the Internal Revenue Service, the Securities and Exchange Commission and the Environmental Protection Agency.
Comments or complaints we receive from small business are forwarded to federal agencies for a high-level review, where the agencies are requested to consider the fairness of their actions. In addition to small businesses, we also assist nonprofit organizations and small government entities serving populations of 50,000 or less. In consideration of concerns of retaliation by an examiner or investigator, we work closely with inspectors general across the federal government. It's important for America's small business owners to tell their government both the good and the bad.
Unfair regulations and the unfair enforcement of regulations cost businesses two of their most precious commodities--time and money. When small businesses are faced with the unfair or excessive acts of federal regulatory enforcement, such as repetitive audits or investigations, excessive fines, penalties, retaliation or other unfair regulatory enforcement actions by a federal agency, it has a significant impact on their ability to operate. The SBA's Office of Advocacy estimates that federal regulations alone cost small businesses with fewer than 20 employees $7,647 per year per employee, 45% more than it costs a large company of 500 or more.
The Office of the National Ombudsman helps entrepreneurs keep their hard-earned money where it belongs--in their pockets--to decide what they need to do with it. Under President George W. Bush's policies, we focus on streamlining regulations because small businesses cannot operate effectively in an environment of uncertainty and confusion. A recent economic impact study on our office found that we have saved upwards of $230 million for small businesses.
Additionally, the SBA establishes federal size standards to determine what constitutes a small business. Financial institutions, whether a credit union, bank or thrift, with assets of $165 million or less are considered small businesses for the purposes of utilizing federal programs, such as government contracting. Additionally, these businesses fall under the scope of the Regulatory Flexibility Act and the Small Business Regulatory Enforcement Fairness Act, and we are therefore authorized to assist with their federal regulatory or compliance needs.
While the NCUA has established its threshold for small credit unions at $10 million in assets or less for many of its special programs and initiatives, I encourage you to contact the National Ombudsman with any concerns of unfair regulatory enforcement by any federal agency that you may have, whether your institution has $10 million in assets or $165 million.
Having previously served five years as the special assistant to the chairman and director of external affairs for the NCUA, I know first hand the impact of regulations on small business and credit unions in particular. The role that America's credit unions play in communities is tremendous and is without question a valued part of the overall fabric that comprises our nation's diverse economy.
This week, CUNA testified at the National Ombudsman's national regulatory fairness hearing. There is no question that credit unions are highly regulated financial institutions, indeed the most regulated among financial institutions. Whether you have concerns about enforcement of the Bank Secrecy Act, rules governing due diligence and third-party vendor relationships, the Fair and Accurate Credit Transactions Act, Regulation Z, privacy notices or accounting issues, we stand ready to assist in navigating the sometimes rough seas of federal regulatory enforcement.
Additionally, while our office cannot assist with matters that do not relate to unfair or excessive regulatory enforcement or compliance assistance by a federal agency, we often refer other issues of concern to the appropriate agency. If the issue regards a proposed regulation or the economic impact of a regulation on the business community, we work closely with the SBA's Office of Advocacy to make sure these concerns are addressed.
In my two years as the troubleshooter for the nation's small businesses, I have been energized by the success our office has had in problem resolution for entrepreneurs throughout the country. In Maine, a small business insisted that its reports and fees had been submitted on time to a federal agency as required, but the regional office denied receipt. After filing a comment with our office, not only was the fine cancelled, but the assistant secretary of the department personally called the small business owner.
In yet another instance, a small brew pub from Illinois had a dispute with the Department of Labor's wage and hour division as to whether his brew masters should be considered hourly or salaried employees. The owner spent over $7,000 in attorney fees contesting the issue. He finally contacted our office, and an equitable settlement was obtained.
I encourage credit unions and small business owners to contact my office for assistance to learn more about our services.