“During 2011 we saw five credit unions–almost 10% of the total– involved in mergers and in each of the five mergers, management and volunteers cited regulatory burden as a primary reason to merge,” declared Schmidt who also serves as the state's chairman of CUAD's Governmental Affairs Committee.

“I am sure that it isn't a shock to you Mr. Cordray or anyone else at the CFPB that credit unions are subject to substantially more regulation now than just a few years ago but what I think might surprise you is that of the 46 credit unions left in South Dakota, 24–more than half–have six employees or less,” said Schmidt.

The wave of new regulations has overwhelmed the staffs of these small credit unions prompting them to look for mergers, he said.

“These credit unions don't have an attorney on staff, they don't have a team of full time compliance specialists, and they don't have the manpower to read and comment on 18,000 pages of proposed rules, interpretive rulings or policy statements,” said Schmidt.

Of the 100 attendees, some 70 were CEOs of banks who voiced also voiced concerns about mergers but hit on mortgage rules hindering their operations, officials said.

“It also was just limited to South Dakota financial institutions,” said a spokesman for the CUAD noting apparently a desire by CFBP and the senator to keep a local focus “rather than bring in North Dakota or Minnesota representatives.”

Schmidt told Credit Union Times he thought the meeting was productive “in that they heard our concerns” but as one participant put it, “let's see where this goes from here.”