In his testimony, Nussle said that credit unions effectively served members during the financial crisis.

“Recent history clearly demonstrates that credit unions were able to continue lending during the recent financial crisis, while other financial institutions failed or had to curtail operations due to damaged balance sheets caused by their less risk-averse practices in the run-up to the crisis,” he said.

He said that increased regulatory burden is the leading cause of credit union consolidation, adding that a CUNA-commissioned study showed that the annual cost of regulation was $7.2 billion in 2014, compared to $4.4 billion in 2010.

“While the top-line data show a healthy, strong and growing credit union sector, credit unions are hiring more compliance officers than loan officers,” he said.

For its part, NAFCU termed the 10% provision as a novel approach that merits more examination.

“NAFCU believes that this proposal deserves careful and thorough examination to ensure the capital requirements in the 'off-ramp' can work for various types of institutions, including whether one level fits all types of institutions, or if 10% is the proper level for credit unions,” NAFCU Executive Vice President/General Counsel Carrie R. Hunt wrote in a letter to the committee.

In his testimony, Nussle said that CUNA is still examining the remaining parts of Hensarling's bill, is likely to support many provisions, but has concerns about a few. He said CUNA plans to convey those positions to the panel when it is finished examining the legislation.

The bill contains – among other things – proposals to create an 18-month exam cycle for some credit unions, convert the CFPB's leadership into a commission and repeal the Volcker rule.

The proposal would essentially repeal the Dodd-Frank Act and replace it with a new regime that includes a plan that would require Congress to approve any significant financial regulation.

The plan would also put all financial regulatory agencies on a budget.

The legislation contains a myriad of regulatory changes that Republicans have pushed during the past several years. The bill is unlikely to become law this year since Congress probably will not consider such sweeping legislation before leaving town to campaign.