ARLINGTON, Va. — NAFCU reiterated its position on a number of areas needing regulatory relief in response to a Small Business Administration call for feedback on existing regulations in need of reform.
The SBA's Office of Advocacy's Regulatory Review and Reform Initiative, or r3, is designed to identify and address existing federal regulations that should be revised because they are ineffective, duplicative, or out of date. Research from the agency shows that complying with all federal regulations costs $1.1 trillion annually. Small businesses pay 45% more per employee to comply with federal regulations than big businesses do, the agency said.
NAFCU suggested reforming Regulation D, which implements the reserve requirements for depository institutions pursuant to the Federal Reserve Act by increasing the six transfer limitation, wrote Dan Berger, NAFCU senior vice president of government affairs, in a Dec. 28 letter to SBA.
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"With the ever increasing use of technology, the financial industry has changed dramatically since Regulation D was implemented," Berger wrote. "As a result, traditional mechanisms for accessing accounts with financial institutions have evolved significantly. As more credit union members are taking advantage of electronic transfers, it is becoming increasingly difficult for credit union members to understand and accept these restrictions."
He added, "NAFCU fully supports the intent and spirit behind Bank Secrecy Act and Anti-Money Laundering law and regulation, particularly in the face of this complex age in which sophisticated terrorist financiers and money launderers pose very real threats to the integrity of the U.S. financial system and safety and security of our nation as a whole. However, while the credit union industry remains firmly committed to helping to combat these threats, we are concerned that the growing reliance on financial institutions to safeguard our financial system from terrorism, money-laundering, and other illicit activity is becoming increasingly costly and burdensome to credit unions."
Another area of reform addresses credit unions and other financial institutions policing new crimes such as unlawful Internet gambling, Berger said. He wrote, "Indeed, the burden of monitoring the citizenry for illegal acts serves only to divert credit unions from meeting their prime mission of serving their members."
NAFCU said it also supports efforts to simplify and improve the process for obtaining mortgages under the Real Estate Settlement Procedures Act.
Initial reform recommendations for SBA's r3 were due by Dec. 31, 2007.
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