US president Donald Trump has passed an executive order to review financial regulation, a measure which could affect the country’s credit union sector.
The order directs the treasury secretary to meet up with members of the Financial Stability Oversight Council and look at ways to amend the Dodd-Frank Act in order to ease regulatory burden.
Trump is opposed to the Act, arguing that it holds back businesses and creates red tape, but any move to rewrite legislation would require Congressional approval.
Trump also wants to roll back the Consumer Protection Act, which established the Consumer Financial Protection Bureau (CFPB), a watchdog which has returned more than USD $11bn to customers of payday lenders.
The legislation was passed under the Obama administration after the 2008 financial crisis to monitor banking institutions more closely and limit the types of risks they can take.
The National Association of Federally Insured Credit Unions (NAFCU) welcomed the review, adding it would continue to lobby for credit unions to be exempted from regulations designed for other financial institutions.
NAFCU president and chief executive, Dan Berger, said: “We welcome regulators taking a hard look at the Dodd-Frank Act for ways to lift current burdens.
“We will also continue to press the CFPB to use the authority it has now to exempt credit unions from regulations that were created to address abuses in which credit unions did not engage.
“Ultimately, we look forward to the administration, Congress and the regulators working together to reduce regulatory burden. We will continue to advocate for credit unions’ best interests as this review moves forward.”
