Just How Bad Is It For Credit Unions?

January 5, 2016 at 10:05 am Leave a comment

Those of us hoping that an analysis of the impact that Dodd-Frank regulations were having on credit unions and community banks would help bolster the case for regulatory overkill were sadly disappointed to read a recent report detailing the impact that Dodd-Frank. While acknowledging the concerns of small bank and credit union representatives, it concluded that it is too soon to definitively say whether smaller financial institutions are facing headwinds because of Dodd-Frank or macro trends unrelated to regulations.  Nevertheless, the GAO was willing to note:

  • The numbers of both full-time and part-time employees generally have decreased since the third quarter of 2010.
  • Noninterest expenses as a percentage of assets are generally the same for credit unions of different sizes and generally have decreased for credit unions of all sizes since the third quarter of 2010.
  • Smaller credit unions tend to have lower earnings as a percentage of assets than larger credit unions, but earnings at credit unions of all sizes generally have increased since the third quarter of 2010.
  • Smaller credit unions tend to have fewer residential mortgage loans on their balance sheets as a percentage of assets than larger credit unions, and most of the smallest credit unions have no residential mortgages at all. However, residential mortgages generally have decreased as a percentage of assets for larger credit unions —those in the third, fourth, and fifth quintiles—but have increased for the smaller credit unions in the second quintile.

In fairness to the GAO, the TRID requirements have just kicked in. My concern is that if policy makers wait for definitive proof of Dodd-Frank’s negative consequences before taking more decisive action, they will be doing the equivalent of an autopsy instead of a medical intervention.

Here is a copy of the report:

http://www.gao.gov/assets/680/674459.pdf

China Syndrome

Our Ground Hog Day economy is at it again. It’s Winter which means that it’s time for the economic intelligentsia to be reminded that the economy is not as good as they think it is.  Yesterday came news that U. S. factories ended last year mired in their worst slump since 2009 and that Chin’s stock market is once again tanking http://www.wsj.com/articles/ism-manufacturing-index-falls-to-48-2-in-december-1451921036…..

As we speak the Governor is giving a preview of his State-of-the State Speech.  It’s worth a listen particularly for those of you who are downstate.

https://www.governor.ny.gov/

Entry filed under: Economy, General. Tags: .

CFPB Clarifies TRID Liability Court Expands Debtor Protections

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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