Just how much is compliance costing your credit union?

by State of Mind

by. Henry Meier

A recent survey compiled by George Mason University provides the most detailed evidence I’ve seen of how much increased compliance responsibilities are imposing financial burdens on small lending institutions.  Although the survey just included banks with assets of $10 billion or less, the results are consistent with what we’ve all been hearing anecdotally about the impact Dodd-Frank is having on credit union budgets.

For example, in the aftermath of Dodd-Frank, most of these banks have:

  • hired an additional compliance person;
  • changed their mortgage lending offerings as a result of QM regulations in the case of 60% of respondents; and
  • experienced an increase in their annual compliance cost at a rate of at least 5% since 2010.

Another statistic that I found interesting was that 65% of the respondents feel that Dodd-Frank is now more burdensome to comply with than the dreaded Bank Secrecy Act.

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