“Whether it's a bank or a credit union, increasing cost pressures against already-thin margins and heavy competition have left even those institutions that didn't get shut down with few options other than to merge or die,” she explained.

The numbers tell the tale, Perdue said. Between 2005 and 2015, a ten-year period spanning the recent recession and continuing recovery, first quarter figures show a drop in the number of community financial institutions that is eerily similar for both the bank and credit union industries.

In Q1 2015, there were 6,509 FDIC-insured banks, compared to 8,976 such institutions in Q1 2005, a drop of 37.9%. For the same period, the number of credit unions totaled 6,402 institutions during Q1 2015, compared to 8,801 credit unions for the same period in 2005, a drop of 37.47%.

Continuity created the BCI in 2013 and does not have aggregate figures to correspond with the past 10 years. In the eight quarters since the index's establishment, the aggregate BCI was 13.91, meaning that financial institutions would have had to add almost 14 additional employees to handle the 549 regulatory items and/or deal with the 1,285 enforcement actions taken against credit unions and community banks since Q2 2013.

“Size absolutely matters,” Perdue said, “and common sense can tell even the folks in Washington that [larger and smaller] entities cannot handle the regulatory impacts in the same way.”

Although some smaller credit unions survive the regulatory onslaught better than others, there are certain predictive characteristics that can foreshadow a credit union's demise, Perdue said.

Lack of a mature compliance management system leads Perdue's list of crippling challenges. Systems that have not been field tested and examiner-approved are less likely to weather new regulations or increased regulatory scrutiny.

Read more: Lack of board and senior management involvement in compliance initiatives causes problems …

“Institutions must ensure they have ways to identify regulatory changes, implement them appropriately and in a timely fashion, and validate compliance outcomes,” Perdue said. “When an institution fails to be responsive on any one of these fronts, compliance risk increases.”

Lack of appropriate board and senior management involvement in compliance initiatives also can be a recipe for disaster, she explained. Credit union leadership that doesn't stay abreast of compliance issues or places all of its reliance on a single compliance staffer will find the credit union's initiatives faltering, she explained.

Finally, credit unions unable to prove they've done things right also are courting trouble. If examiners don't have hard evidence that compliance procedures were done correctly, they will be skeptical about outcomes, Perdue said.

“The saying goes, 'If it isn't documented, it didn't happen,' and nowhere does that play out more often than in the course of a regulatory exam,” she added.

Despite credit unions' cooperative status and recognition by the NCUA that they pose less threat to the overall financial systems than banks do, credit unions are no better off than banks when it comes to shouldering an increasing regulatory burden, Perdue said. In fact, the NCUA is showing a greater appetite for stricter enforcement, meaning the situation will worsen before it gets better – if it gets better at all.

“This is one area where banks and credit unions, instead of fighting each other, or even fighting the imaginary enemies of Congress or the regulatory agencies, ought to focus on fighting the real enemy, which is the ever-increasing cost of compliance,” Perdue said. “All community financial institutions must find ways to modernize and galvanize their compliance management systems so that they contain cost without sacrificing performance. It's critical for their survival.”