The two largest national trade associations representing credit unions praised the House Financial Services Committee for approving multiple bills that would benefit its members if adopted into law. The bills were among 13 the committee voted to advance to the full House for consideration.
The Credit Union National Association (CUNA) and the National Association of Federally-Insured Credit Unions (NAFCU) were particularly vocal in their support for H.R. 4464, the “Common Sense Credit Union Capital Relief Act,” which would repeal the National Credit Union Administration’s (NCUA) rule on risk-based capital (RBC), scheduled to become effective Jan. 1, 2019. The measure, sponsored by Rep. Bill Posey (R-Fla.), passed by a 33-25 vote.
“NAFCU thanks Rep. Posey, and committee Chairman [Jeb] Hensarling, NCUA Chairman [J. Mark] McWatters, and members of the House Financial Services Committee who have acknowledged the negative impact the current RBC rule would have on credit unions,” NAFCU President and CEO Dan Berger said in a statement. “If the RBC rule is allowed to take effect as written, more than 400 credit unions would see a decline in their capital cushions. We look forward to working with the NCUA to craft an RBC system that is better suited to the credit union industry.”
CUNA Chief Advocacy Officer Ryan Donovan also released a statement about the RBC bill, saying, “It’s always good news to see common-sense pieces of legislation advance in the process, and CUNA will continue its work to move these and other pieces of legislation that would provide needed regulatory relief forward.”
CUNA and NAFCU both wrote to committee leaders ahead of the bill’s mark-up urging them to approve the measure. The organizations believe it could help create an RBC system that accounts for credit unions’ unique business model and the increased costs and regulatory burdens the NCUA rule would mean for the credit union industry.
The American Bankers Association (ABA) noted its opposition to repealing the RBC rule in a blog post but indicated support for other committee-approved measures that received backing from CUNA and NAFCU, suggesting that there is common ground between banks and credit unions on the issues addressed in those bills.
The credit union trades and ABA expressed support for the “Financial Institutions Examination Fairness and Reform Act” and H.R. 1457, the “Making Online Banking Initiation Legal and Easy (MOBILE) Act.” The Mortgage Bankers Association also announced support for H.R. 4545.
H.R. 4545 would set examination fairness standards for federal financial regulators, requiring clear guidance from regulators, consistency from exam to exam, timeliness of reported exam results and an independent appeals process free of examiner retaliation. It passed by a 50-10 margin.
Legislators, such as Rep. Nydia Velazquez (D-N.Y.) and the bill’s sponsor Rep. Scott Tipton (R-Colo.), cited CUNA-provided information while discussing the bipartisan legislation.
“According to CUNA, in 2015 more than three-quarters of credit unions said heavier regulatory and examination requirements are putting increased pressure on members,” Velazquez said “Half of CUNA members surveyed said examiners are applying guidance and best practices as if they had the force of regulations. This type of environment hurts main street businesses and must be addressed.”
Tipton referenced an examination survey CUNA conducted in 2010 in which 27 percent of respondents said they were dissatisfied with their most recent exam, and 21 percent said that they wanted to appeal the results but could not. Two-thirds of those credit unions wishing to appeal indicated that they feared retaliation.
H.R. 1457 would establish requirements regarding the use and electronic storage of consumers’ driver’s licenses and identification card information when they open an account, or when other financial services are provided. The measure is intended to help prevent fraud and other criminal activity and received unanimous committee approval.
The other bills that received unanimous committee approval were H.R. 435, the “Credit Access and Inclusion Act,” and H.R. 2948, which amends the Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act.
H.R. 435 would amend the Fair Credit Reporting Act (FCRA) to authorize the Department of Housing and Urban Development (HUD) to furnish consumer credit reports with information about a person’s payment history, including rent payments and payments on utility and telecommunications contracts.
H.R. 2948 would provide temporary loan-origination authority for registered loan originators when they move from a financial institution to a state-licensed non-bank originator or to a state-licensed loan originator in another state.
The committee also approved: H.R. 3179, the “Transparency and Accountability for Business Standards Act” (34-26); H.R. 3864, the “Native American Housing Assistance and Self-Determination Reauthorization Act” (37-23); H.R. 4519, which would repeal section 1504 of the Dodd-Frank Act (33-27); H.R. 4529, the “Accelerating Access to Capital Act” (34-26); H.R. 4537, the “International Insurance Standards Act” (56-4); H.R. 4546, the “National Securities Exchange Regulatory Parity Act” (46-14); and H.R. 4560, the “GSE (government-sponsored enterprise) Jumpstart Reauthorization Act” (33-27).