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CU Regulatory Relief Cited During SBC Vote
Friday, May 22, 2015 6:35 AM

Credit union interests were invoked a number of times throughout the U.S. Senate Banking Committee’s markup of regulatory relief legislation Thursday. Letters of support from Credit Union National Association and its partners were read by Sens. Richard Shelby (R-AL) and Mike Crapo (R-ID) during consideration of a number of regulatory relief proposals.

Shelby’s bill, the Financial Regulatory Improvement Act of 2015, passed the committee with a 12-10 vote along party lines, and will be reported to the Senate. Shelby addressed the possibility of that outcome in his opening statement, and said such a vote will not likely spell the end of the bill.

“In fact, I believe it presents another opportunity to explore areas of potential agreement before this bill goes to the Senate floor, which I fully expect that it will,” Shelby said. “It remains our strong preference that we find a way to come together on a bipartisan basis before we reach that point.”

CUNA wrote to Shelby and Sen. Sherrod Brown (D-OH) Wednesday to express its support of a number of provisions in the bill’s first title.

These provisions would:

  • Eliminate the requirement that credit unions send annual privacy notices unless the policy has changed;
  • Allow privately insured credit unions to become members of the Federal Home Loan Bank system;
  • Establish an application process to designate an area as “rural;”
  • Allow an independent ombudsman to hear examination concerns;
  • Treat mortgages held in portfolio as qualified mortgages;
  • Remove an escrow for future insurance payments from the points and fees calculation;
  • Allow the CFPB examination threshold of $10 billion to be adjusted for inflation;
  • Call for a study on privacy risks of government publication of personal financial data;
  • Direct federal banking agencies to conduct a study of appropriate capital requirements for mortgage servicing assets;
  • Grant lenders a safe harbor until the CFPB can certify its Truth in Lending Act-Real Estate Settlement Procedures Act forms do not conflict with state law;
  • Require CFPB advisory meetings to be open to the public;
  • Require the NCUA to hold public budget hearings;
  • Ensure Federal Home Loan Bank System membership for credit unions with under $1 billion in assets will have parity with similar-sized banks; and
  • Ensure a comprehensive regulatory review to identify unnecessary or redundant regulations.

“There is no question that if these provisions were enacted, credit unions would realize a meaningful reduction in their regulatory burden, creating a positive and noticeable impact to our members,” Nussle wrote. “We look forward to working with the Committee as you advance regulatory relief for community based financial institutions.”

The bill also has two CUNA-supported amendments approved by the committee. The first, proposed by Crapo, would prohibit federal regulators from implementing or participating in Operation Choke Point, a Department of Justice initiative that some have claimed is used to separate consumers from access to financial services.

CUNA, the National Association of Federal Credit Unions, and the Independent Community Bankers of America wrote to Crapo prior to the hearing to express support for the amendment, and read from the letter during the discussion of the amendment.

Crapo’s amendment passed with a 12-10 vote.