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The hearing, titled “Who's In Your Wallet: Examining How Washington Red Tape Impairs Economic Freedom,” also saw testimony from Meredith Fuchs, general counsel at the CFPB; Richard Osterman, acting general counsel at the FDIC; Scott Alvarez, general counsel at the Federal Reserve; and Amy Friend, chief counsel at the Office of the Comptroller of the Currency.

McKenna said in his testimony the NCUA recognizes the need to reduce compliance costs associated with new rules, particularly for small credit unions.

“Therefore, the agency will not engage in formal rulemaking unless there is a clear need for a rule. Before engaging in formal rulemaking under the Administrative Procedure Act, NCUA conducts an analysis about the need for and impact of a potential rule and the associated costs and benefits,” the agency attorney said.

“NCUA also gathers information from stakeholders, including comments received as part of NCUA's rolling regulatory review and interactions with credit unions, trade associations, state regulators, and other interested parties,” he added.

When considering regulatory changes, McKenna said the NCUA Board considers both the direct and indirect potential costs, as well as the potential benefits.

“Direct costs include any expenses credit unions are likely to incur in complying with the rule. These costs might include the additional time spent collecting data, reporting, and training staff, as well as the need to acquire new software or services. Indirect costs might include higher lending rates or fees, lower rates on share deposits, or other unintended constraints on credit union activities for their members,” he said.

“NCUA is committed to providing transparency in the rulemaking process. NCUA publishes every proposed and final rule in the Federal Register. NCUA also notifies the Office of Management and Budget of items for inclusion in the (Obama) Administration's 'Unified Agenda' every six months,” McKenna's written testimony added.