WASHINGTON-Now that the House has passed H.R. 1375, theFinancial Services Regulatory Relief Act, the Senate may get thehint to begin working on their own bill. Credit union lobbyists arealso hoping it could spur movement on the Credit Union RegulatoryImprovements Act (H.R. 3579). They pointed out that with the regrelief bill out of the way in the House, the Financial Institutionsand Consumer Credit Subcommittee can schedule a hearing for CURIA."I think it opens the door for a hearing on the issue later thisspring and also, the fact that reg relief contains many of theprovisions in CURIA, a strong vote for the reg relief bill, Ithink, implies an endorsement by members of the House for many ofthe provisions in CURIA," NAFCU Director of Legislative andPolitical Affairs Brad Thaler said. Because CURIA contains many ofthe same provisions, reg relief's passage "lays the groundwork" forthe credit union specific legislation. However, CUNA Senior VicePresident of Governmental Affairs John McKechnie noted, "I thinkit's important to remain focused on the fact that there are partsof CURIA that are not in Reg Relief and those are parts thatcontinue to get attention from the House: member business lendingprovisions, capital provisions. That's important in this wholeprocess because it's really elevating Congress' understanding ofthose issues and I think that it makes it more likely that at somepoint in the future those provisions are going to get incorporated,into either in this bill by itself, or into another bill. That hasbeen a part of our strategy all along and it continues to movepretty nicely, especially when you look at the number ofco-sponsors CURIA is starting to attract." CUNA Vice President ofLegislative Affairs and Senior Legislative Counsel Gary Kohnemphasized that the lopsided vote was very important. "It was asignificant vote for a lot of reasons," he said. "In spite of the"controversies," it was an overwhelming vote, 392-25, and it shouldnot be lost that credit unions were a big victor in this wholeissue, that the banks didn't really care about the bill-in somerespects didn't want the bill." While America's Community Bankersand the Independent Community Bankers of America came around tosupporting the bill despite the credit union provisions, theAmerican Bankers Association did not publicly support or opposeH.R. 1375. ABA Public Relations Director Charlotte Birch indicatedthat the organization would be interested in working on theSenate's bill. "We are interested in working for a bill we cansupport," ABA Spokesperson Charlotte Birch said. She made clear thebill ABA would support would not include the credit unionprovisions from the House bill. Senate Banking Committee ChairmanRichard Shelby (R-Ala.) has tasked Senator Michael Crapo (R-Idaho)with drafting the Senate bill, which will be independent of theHouse bill. According to credit union lobbyists, rumors arecirculating that there could be hearings-and possibly a billdrafted-on the Senate side this spring. During a subcommitteehearing a few years ago, House Financial Institutions and ConsumerCredit Subcommittee Chairman Spencer Bachus (R-Ala.) warned thebanking trade groups to back off of their criticism of the creditunion provisions in the bill. ACB and ICBA have heeded thiswarning. ACB Executive Vice President and Managing Director ofGovernment Affairs Bob Davis explained that his organizationpreferred to take a "glass is half full" approach to the issue.ICBA's letter to House Financial Services Committee Chairman MikeOxley (R-Ohio) just prior to the bill's passage only discussed theIndustrial Loan Company (ILC) provision. The ABA still withheld itssupport from the bill. "A lot of community banks are very concernedabout their futures when it comes to competing with the large,diversified credit unions.That was the decision of our bankers.Obviously, they take it very seriously," Birch said. Credit unionsnot only scored a victory in getting their provisions past thebankers' objections, but lawmakers are also taking note of theirefforts. "If you talk to folks on the Hill, particularly with thecommittee, they'll universally tell you that credit unions were thegrassroots power behind this bill," Kohn said. NAFCU's Thalerpointed to Congressman Steven LaTourette's (R-Ohio) statement onthe House floor. "It is imperative that we allow credit unions tocontinue to change with the ever-expanding financial marketplace,just as we do with the banking and the thrift industry," LaTourettesaid, according to the Congressional Record. "Credit unions do anexcellent job of serving their members, a tradition we need to helpprotect and preserve." He also congratulated the Financial ServicesCommittee chairman and ranking member for crafting the bill and thecredit union trades for their work to obtain a bill that includes"provisions with real teeth that benefit the credit unionindustry." A `dear colleague' letter, circulated by H.R. 1375'sprimary sponsors Representatives Shelley Moore Capito (R-W.V.) andMike Ross (D-Ark.), stated explained how a number of the provisionswould ease the regulatory burden on the nation's credit unions.However, it is still an up hill battle in the Senate over theIndustrial Loan Company provisions and whether or not to allow themto branch over state lines. A compromise was worked out in theHouse, but it may be trickier in the Senate. Senate BankingCommittee Ranking Member Paul Sarbanes (D-Md.) and the #2Republican committee member Bob Bennett (Utah) hold diametricallyopposite positions on the issue. Kohn said the question is whetherShelby feels strongly enough about passing a bill to impose asolution. "We've heard a variety of rumors, I suppose you wouldcall them, about how they're proceeding," Kohn said. "We do knowthat they have met with all the regulators and received input thatthey're going to get from the regulators, and certainly they'vereceived input from us and other institutions as well. But myunderstanding is that they have not actually sat down and draftedanything. At this point, there is even some thought that the SenateBanking Committee may hold hearings prior to drafting a bill and ifthat's the case, then obviously it leaves a lot less time to act ina shortened session of Congress." Thaler said that Chairman Shelbyhas admitted that getting the bill out of the subcommittee is thebest bet for it in the Senate this year. "This bill really took afew years to bring to fruition in the House and I don't thinkthere's a lot of unrealistic expectations that the Senate may get abill out this year," he said. -

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