WASHINGTON -- Though it may be difficult to recognize from previous forms, a pared-down Financial Services Regulatory Relief Act was signed into law this year, leaving credit unions to continue pursuing regulatory relief.
In a late night session that ran into the wee morning hours of Sept. 30, prior to adjourning for the campaign season, the Senate passed the final iteration of the bill by unanimous consent, which means there were no remaining objections; just days before the House passed the bill 417-0. Credit union specific provisions in the legislation included allowing low- and no-cost land leases on military installations; expanding the 12-year loan maturity limit to 15; permitting wire transfers and check cashing for anyone within the field of membership; and the so-called "FASB fix" from the original Senate bill, which will change the definition of net worth in the Federal Credit Union Act to avoid the unintended consequences of anticipated accounting rule changes. Another was added to clarify the Federal Trade Commission's authority to begin oversight of private deposit insurance disclosures with states overseeing the availability of the insurers' financials originally enacted in the Federal Deposit Insurance Corporation Improvement Act about a decade ago. Additionally, the law permits, but does not require, the Federal Reserve to begin paying interest on Reg D "sterile" reserves in 2012. Reg relief was signed into law by President George W. Bush Oct. 13. NCUA acted quickly to implement the new law at its Oct. 19 board meeting with an interim final rule permitting credit unions to offer wire transfers and check cashing to potential members. The House version of the bill included more than a dozen credit union specific provisions and was the product of six years worth of work. While the final version was not nearly as expansive, credit union lobbyists were heartened to see that credit unions received equal treatment with banks and thrifts concerning the general number of provisions and the substance.
Tensions nearly toppled the balance that was regulatory relief. When a House "proffer" to the Senate included a provision to eliminate thrifts' business lending cap with nothing for credit unions, CUNA threatened to kill the bill. The provision was removed despite audible moans and groans from America's Community Bankers and others.
No rest for the weary, however. Credit union lobbyists--as well as the banks'--continued to strategize on how they will launch their next regulatory relief offensive in the 110th Congress. While all-encompassing regulatory relief legislation is being discussed, credit unions are still pushing their own bill, the Credit Union Regulatory Improvements Act.
Lobbyists have said the legislation, co-sponsorship of which grew to 125 in the 109th Congress, will be tailored similarly to the most recent version of CURIA. The sections concerning risk-based capital reform and business lending are expected to remain as well as the other smaller provisions that did not get approved with regulatory relief such as allowing credit unions converting to community charters to maintain their select employee groups outside the adopted community and permitting credit unions to lease out office space in underserved areas regardless of the fixed asset cap. Credit union lobbyists are also pursing changes to the Credit Union Membership Access Act that would allow all federal credit union charter types to adopt underserved areas.
CURIA's primary sponsors, Congressmen Ed Royce (R-Calif.) and Paul Kanjorski (D-Pa.), have expressed interest in the bill again for the new Congress, though Kanjorski could take the lead given the Democratic take over. --email@example.com