WASHINGTON–While all of Washington’s attention yesterday was on testimony from former FBI Director James Comey before a Senate Committee, another Senate Committee also held a hearing, this one featuring three credit union witnesses.
Testifying before the Senate Banking Committee hearing on “Fostering Economic Growth: The Role of Financial Institutions in Local Communities” were Dallas Bergl, CEO of INOVA FCU (testifying on behalf of CUNA), Steve Grooms, CEO of 1st Liberty FCU (testifying on behalf of NAFCU) and John Bissel, CEO of Greylock FCU.
Bissell said in Berkshire County, Massachusetts, while hiring has been “brisk,” not everyone is “participating in the rebound.” He said that in his market “many residents are caught in the bind of low-wage jobs and unaffordable housing.
“For working families living on the edge of financial stability, a failed transmission or a dead battery means an immediate loss of income,” Bissell testified. “Others may be in between jobs and have a great idea for a small business, but do not qualify for traditional bank financing.”
As the only CDFI credit union in its region, Bissell said the $1-billion Greylock FCU has been working to build “wealth building opportunities,” including expanding its New Road Auto Loan program and its “Safety Net” lending.
“In conclusion, I want to offer my thoughts on the role of regulation,” said Bissell. “The people I am concerned about in Berkshire County are still hurting, and make no mistake about it, these consumers need protection. The abuses and predatory practices that brought about the Great Recession destroyed 40% of American household wealth. Black families lost 50% of their household wealth and Latino families lost 67%. Having one half to two-thirds of your wealth taken from you is far too great a price to pay, ever again. And if we thought the abusive and fraudulent practices exercised by big banks had ended, we received a rude awakening with the Wells Fargo scandal. Consumers need, and deserve, much stronger protection than they had previous to 2010. Credit unions did not create the financial crisis, and I am proud of the role we played in helping consumers and our local economies to recover…While I want smarter regulation as much as anybody, I ask that you please do not allow a repeat of the excesses and predatory practices that precipitated the crisis in the first place.”
In his testimony, Bergl said his $336-million CU has become “an invaluable financial lifeline, because we provide products and services that larger financial institutions or nonbank lenders often don’t.”
After outlining how hard the Great Recession hit his home market, Bergl said, “I’d like to be able to say that credit unions face no hurdles in our pursuit of this statutory mission. Sadly, that is not the case. We supported the Government’s reaction to the bad policies that allowed: anti-consumer practices, “too-big-to-fail” institutions, and economic harm to Americans. What we did not expect, what we do not support, is the onslaught of new regulatory burdens on credit unions while the biggest banks get even bigger. That, simply, does not make sense, because we’re the ones who put our members first.”
Bergl told the Senate credit unions have expressed concern over new regulations and repeatedly asked for tailored regulations, and added, “In truth, the current regulatory scheme only serves to benefit the largest banks and predatory lenders that have the resources to game the system. This should not be the way the world works.”