In the movie The Incredibles, a computer-animatedvillain uses dozens of weapons to slow down and otherwise stymiethe lovable Mr. Incredible.

One of the most memorable is a bank of cannons that fire heavy,sticky blobs. When one blob lands on our hero, it hardly slows himdown. Several in a row become a sticky annoyance. But once theheavy pelting begins, he's immobilized.

According to the Filene Research Institute's newest study,Only Up: Regulatory Burden and Its Effects on Credit Unions,the flurry of new and revised regulations have created a similarlysticky annoyance for credit unions in both the United States andCanada.

Because compliance has a high fixed cost component, this newregulatory regime seems to be generating artificial economies ofscale. Not surprisingly, the research revealed a very strongnegative relationship between the size of a credit union and therelative intensity of its regulatory compliance costs.

For example, in Canada, credit unions in the largest quartilebore one-fifth of the comparable costs of those in the smallestquartile. In the U.S., the difference is even starker: those in thelargest quartile bore just one-tenth of the regulatory compliancecosts borne by those in the smallest quartile.

To put into context what this regulatory shift means for creditunions, the study's authors estimated that between 2007 and 2012,the number of full-time equivalents devoted to regulatorycompliance increased on average by 70% in the U.S. and by 94% inCanada. Both of these figures outpaced normal staffing increases byat least a factor of three.

Measuring regulatory burden is like identifying the stickyblobs. It's a first step. The second step is ensuring the bestoutcome for consumers require treating organizations with differentcharacteristics in different ways.

Read more in Filene's report, OnlyUp: Regulatory Burden and Its Effects on Credit Unions.

The report is the latest in a series of exclusive content fromFilene available to CU Times readers. Check out theseother reports:

• CreditUnion Implications of Living Trusts

• Gen Y Personal Finances: A Crisis of Confidence andCapability
• Impactsof Mergers on Credit Union Costs: 1984 – 2009
• ChannelDelivery for Tomorrow
• From Presence to Purpose: Developing Social Media Strategiesand Metrics for Credit Unions
• Improving Social and Environmental Sustainability: A CreditUnion Assessment and Comparison
• Mortgages and Credit Union Performance: 1980-2011
• Future of Payments: Credit Union Implications – A Colloquiumin Salt Lake City
• Asset-Liability Management: Theory, Practice, Implementation, andthe Role of Judgment

George Hofheimer is the chief research and innovation officer atthe Filene Research Institute. He can be reached at608-852-4632 or [email protected].