In a confirmation of what credit union executives have suspected, the cost of regulatory compliance increased drastically between 2010 and 2014, according to a CUNA-commissioned report from Cornerstone Advisors.
In 2014, the regulatory cost reached 54 basis points of assets — an increase of 15 basis points since 2010. Translated, that means that regulatory costs for credit unions were $1.7 billion more than they would have been without the changes made between 2010 and 2014 — a period that includes enactment of the Dodd-Frank Act.
"The study found that the costs that credit unions bear as a result of regulation, even when conservatively measured, are very high, and have increased substantially since the financial crisis and the Great Recession," Cornerstone concluded in the study of 53 credit unions. "The burden is particularly egregious for smaller institutions."
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