Paul Gentile is the president and CEO of the Cooperative Credit Union Association, which serves credit unions in Rhode Island, Massachusetts, New Hampshire and Delaware. He talks with Providence Business News about this year’s legislative session in Rhode Island and Massachusetts, and what he’s keeping a close eye on at the federal level.
PBN: Is there any specific state legislation CCUA will be backing this legislative session?
GENTILE: In Massachusetts, we have two core bills, one to modernize the state credit union act for state-chartered Massachusetts credit unions. It's a series of modernization provisions to ensure credit unions have an effective operating environment. We are also backing legislation to allow credit unions to accept public deposits in Massachusetts. Whenever credit unions and banks compete for public deposits, the public entities win with a more competitive rate of return on their deposits.
PBN: What impact do you expect the President Donald Trump Administration to have on credit unions?
GENTILE: The Trump Administration will have a significant effect on credit unions in that now the NCUA [National Credit Union Administration] board will have two Republicans and one Democrat. The Administration has the ability to name the chairman as well as all board members. Given the chairman sets the policy direction for the agency, whoever the Administration selects is vital to the future of NCUA. We are very pleased that the Administration has named Mark McWatters as the acting chairman and are hopeful he will be named the permanent chairman shortly.
PBN: How do credit unions stand to benefit from the possible rollback of regulations over the financial-services industry?
GENTILE: We believe in the spirit of the Consumer Financial Protection Bureau. Credit unions inherently do consumer protection every day. The problem with Dodd-Frank and the CFPB is the regulations have gone too far. The CFPB was designed for the bad actors that caused the financial crisis and to regulate too-big-to-fail financial institutions. Unfortunately, many of the CFPB's regs affect even the smallest of credit unions.
PBN: What could help?
GENTILE: Legislation has already been introduced to exempt institutions under $50 billion from the CFPB and we are hopeful we will see some sort of exemption for community-based institutions like credit unions and community banks. If consumers understood the cost the CFPB's regulations have, and in many ways the handcuffs they put on credit unions from helping consumers with financial challenges, they would be concerned that the good intention of the CFPB has gone too far and is actually negatively impacting consumers. We want to help those in need, not having to worry about being put in the regulatory box of CFPB with stringent restrictions.
PBN: What other regulatory action could most benefit credit unions, and what could do the most harm?
GENTILE: Overall, credit unions face too much regulatory burden. A Credit Union National Association survey on regulatory burden costs estimates that it costs Rhode Island credit unions $23 million to comply with the current regulatory framework. That equates to $83 per credit-union member. Imagine if credit unions could put that cost back into the pockets of credit-union members, rather than costly regulations.