Most costs of compliance don’t vary by size and are proportionately a much greater burden for smaller institutions, Peoples FCU President/CEO Tom Brewer told members of the House Subcommittee on Financial Institutions and Consumer Credit on Monday.
Brewer was one of five witnesses scheduled to testify during a field hearing that focused on challenges facing community financial institutions in West Virginia, the home state of subcommittee chair Rep. Shelley Moore Capito (R-W.Va.).
The leader of the $95 million credit union, which is headquartered in Nitro, W.Va. and was originally chartered to serve employees of a Union Carbide plant, said in his prepared remarks that regulatory burden is one of the most significant changes he has seen during his 27 years in the credit union industry.
Of the credit union’s 29 full time employees, one is devoted full-time to compliance.
“With a relatively small staff, having someone devoted full-time to compliance is a considerable financial burden and was unheard of only a few years ago,” Brewer said. Compliance diverts resources from member service and impacts what the credit union can pay members on their savings and what members pay in loan interest, he added.
Brewer also promoted member business lending legislation, which he said would bring 335 new jobs to the Mountain State, and the Capito-sponsored H.R. 3461, the Examination Fairness and Reform Act.
The field hearing took place at the Robert C. Byrd Courthouse in Charleston, W.Va. Congress is currently on break and won’t return to Washington until Sept. 10 after the national conventions.