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Financial CHOICE Act Advances in Congress; CUs Called to Action
Friday, June 9, 2017 6:40 AM

The U.S House of Representatives on Thursday advanced a major regulatory relief measure designed to roll back several provisions in the Dodd-Frank Act. House members voted 233-186 in favor of the Financial CHOICE Act (HR 10) authored by House Financial Services Committee Chairman Jeb Hensarling (R-Texas).

“As the largest credit union league in the country, Cornerstone is pleased to have played what I believe is an important role in passage of this common sense legislation," said Caroline Willard, president and CEO of the Cornerstone Credit Union League. "We at Cornerstone are thrilled about the victory on the House floor today. A victory for Common Sense Regulation—aka, the Choice Act—is a victory for consumers, as it paves the way for credit unions to offer their services with fewer impediments. We extend our deepest thanks to Chairman Hensarling for his determination to see this bill pass the House." 

The Financial CHOICE Act (Creating Hope and Opportunity for Investors, Consumers, and Entrepreneurs) lays out key provisions for regulatory relief for credit unions and other community financial institutions, which include:

  • Allowing qualifying credit unions (with an average leverage ratio of at least 10 percent) to be exempt from certain provisions of the Federal Credit Union Act and rules and regulation promulgated by NCUA;
  • Changing the structure and authority of the Consumer Financial Protection Bureau (CFPB). This includes bringing the bureau under the appropriations process; establishing an independent inspector general, removing its Unfair, Deceptive and Abusive Acts authority; establishing an office of economic analysis; and repealing its authority to restrict arbitration;
  • Providing relief from the Home Mortgage Disclosure Act by increasing reporting requirement thresholds to 100 closed-end and 200 open-end mortgages;
  • Adjusting the definition of “points and fees” under the Qualified Mortgage (QM) rule;
  • Classifying loans held by financial institutions in portfolio as QM loans;
  • Exempting mortgage loans made by financial institutions under $10 billion in assets and held in portfolio for three years from the Truth in Lending Act’s escrow requirements and exempting mortgage servicers that service fewer than 20,000 mortgages annually from the requirements of Section 6 of the Real Estate Settlement Procedures Act;
  • Requiring the National Credit Union Administration (NCUA) to allow examination and public comment of its budget before adoption and requiring more transparency regarding the overhead transfer rate;
  • Reforming the examination process by creating an independent ombudsman and an independent appeals process;
  • Protecting properly trained financial institution employees that report in good faith suspected financial elder abuse;
  • Requiring CFPB and NCUA and other regulators to account for an entity’s size and risk when promulgating regulations.

“One of Cornerstone’s top legislative priorities is to pursue any and all remedies to alleviate regulatory burdens on member credit unions, and we are extremely pleased about the passage of the Financial CHOICE Act in the House,” said Jim Phelps, Cornerstone’s chief advocacy officer. “Over the past several months, our lobby team has worked with Chairman Hensarling and members of our congressional delegations to identify the regulatory issues of greatest concern to Cornerstone credit unions. We greatly appreciate Chairman Hensarling’s staunch commitment to regulatory relief for credit unions and other community financial institutions.”

Now that the fight for regulatory relief has moved to the Senate, it’s time for credit unions to intensify their grassroots efforts. Just yesterday, two credit union witnesses testified at a Senate Banking Committee hearing about the need for regulatory relief. But that's just the start for credit unions—it's essential that we activate TODAY so we don’t lose momentum on this critical issue.

“We expect the debate in the Senate to be rigorous, and we are going to need the help of all Cornerstone credit unions to educate our U.S. senators about the difficulties credit unions face under Dodd-Frank-era regulations," said Willard.

What You Can Do Now
Credit union CEOs, staff and directors: Cornerstone urges you to contact your senators today, and tell them to enact common-sense regulation and that the current one-size-fits-all regulatory scheme only benefits the largest banks and predatory lenders that have the resources to game the system.

With CUNA's new campaign tool, tell them how new regulations have hindered your credit union's ability to serve your members. These personal stories are crucial to educating Washington about how regulatory burden hurts Main Street financial institutions like credit unions. 

Ask your membership to do the same thing by using the Member Activation Program (MAP) messaging templates. If you have questions about MAP, please contact Gretchen Ziegler at

Again, please don’t delay in contacting your senators TODAY. A strong grassroots response from all credit unions is crucial to advancing regulatory relief through the Senate.