Perry vows to repeal sweeping financial regulations
DES MOINES — Some Iowa credit-union officials said they're pleased with Iowa caucus contender Rick Perry's call to repeal sweeping regulations on the financial industry.
At a stop in Des Moines last week, the Texas Republican called for President Obama, who signed Dodd-Frank into law, to put a six-month suspension on all of the law's pending regulations.
"One of my top priorities that I'll share is to repeal this onerous Dodd-Frank regulatory legislation," Perry said in Des Moines last week. " … And it's no wonder that banks and credit unions are afraid to lend money, because it's the onerous regulatory climate that's killing the jobs, that's killing this economy."
That promise was met with applause from leaders of Iowa's credit unions, who said their industry has been plagued with over-regulation leading up to and following the economic collapse of 2008.
One local credit union leader said new federal regulations pushed forward by Democrats in Congress unfairly punish local lenders as well as big Wall Street lenders.
"We're painting everyone with the same brush, and that's probably not a good thing," said Jeff Disterhoft, president and chief executive officer of the University of Iowa Community Credit Union. "That's a knee-jerk reaction, to paint everyone with the same brush size when Main Street lenders such as ourselves weren't responsible or involved in a lot of the ails that contributed."
Signed by Obama in 2010, the Dodd-Frank Act was intended to place strict regulation and oversight on financial institutions.
And while officials agreed regulation is necessary when it comes to bigger banks, they can be taxing on smaller credit unions.
"It's very hard for small credit unions to have these resources to comply," said Pat Jury, president and chief executive officer of the Iowa Credit Union League. "And we're very consumer-focused and consumer-centric institutions, so we aren't able to comply and there is a threat for the small institutions, where the CEOs have to do the marketing and the janitorial work and regulatory compliance, that it gets to be so much that it gets to be where they have to make a decision on where their priorities are."
Disterhoft said the industry has also been deeply wounded by over-regulation resulting from legislation in the late 1990s which placed what Disterhoft and Perry described as an "arbitrary" 12.25 percent business lending cap on credit union's total assets.
As a result, the Credit Union National Association is lobbying for legislation that would raise the member business-lending cap to 27.5 percent for well-capitalized credit unions.
Disterhoft said raising the cap could result in $13 billion of additional lending across the country that would create an estimated 140,000 jobs across the country — at no cost to taxpayers.
Ultimately, Disterhoft said, the regulations are hurting both nonprofit credit unions — many of which have reached or are close to reaching their lending cap — and their consumers.
"While it may seem like a great thing to add more checks and balances and regulation, ultimately it's the consumers that pay for their regulation for the price they pay on loans," Disterhoft said. "It's not a good thing for the people we serve, because it's ultimately the consumers that pay the cost of that and in today's times that's tough."
But some maintain even more regulation is needed.
"Perry's campaign pledge to repeal Dodd-Frank is more proof that his campaign puts the interests of big banks and Wall Street corporations ahead of the interests of everyday people and a fair economy that works for everybody," said David Goodner, an Iowa Citizens for Community Improvement organizer. "We need stronger and more effective public oversight of big-moneyed corporate interest groups, not more deregulation. Deregulation and lax enforcement is what got us into this mess into the first place, and it's time for national leaders from both political parties to stop kowtowing to corporate power and start putting communities before corporations and people before profits."
During his 30-minute speech last week in Des Moines, Perry touted his support of tax exemptions for nonprofit Texas credit unions and offered other fixes.
"We need to consider alternatives, such as freeing up lending credit unions to help provide for Main Street, creating jobs, income, the tax revenue, that's what you have to do," Perry said.
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