With Deregulation on the Outs, CU Reg Relief May Be Sliced and Diced
In other words, goodbye CURIA and CURRA.
"Smaller bills allow us to make our issues more relevant to what Congress is talking about," said CUNA Vice President of Legislative Affairs Ryan Donovan.
Also, he noted that slicing up priorities, such as lifting the cap on member business loans and reforming the capital system, will make credit unions less of a target for bankers and other political adversaries.
NAFCU Director of Legislative Affairs Brad Thaler said, "There is not a strong appetite for regulatory relief but regulatory improvement, so that's how we are going to pitch it."
CUNA and NAFCU are hoping that raising or eliminating the member business lending cap can be included as a provision in the economic stimulus bill that Congress is working on.
They contend it would be an easy way to infuse capital into the economy at no cost to taxpayers. The banking lobby has long fought those efforts, arguing that raising the cap would get credit unions more involved in activities that should be reserved mostly for banks.
Also, the NCUA has not taken a position on several of these priorities and that could make it harder to persuade lawmakers to enact them. NCUA Chairman Michael E. Fryzel said that the board hopes to finalize its legislative agenda later this month and would seek input from all facets of the credit union movement.
Credit unions have had mixed results when trying to attain regulatory relief.
Last June, the House passed the Credit Union Bank and Thrift Regulatory Relief Act (H.R. 6318), which would grandfather existing approvals of underserved areas and allow federal credit unions to apply to serve underserved areas outside their field of membership. Loans in those communities and to religious, nonprofit institutions would not count against their member business loan cap. It would also permit credit unions to provide short-term unsecured loans to anyone, including nonmembers, in their field of membership.
The bill was then sent to the Senate, which took no action on it.
The House bill was a scaled-down version of the Credit Union Regulatory Improvements Act, which had 150 cosponsors in the House and five in the Senate. It included capital reform and raising the cap on member business loans to 20% of assets.
Both Donovan and Thaler said that there will be additional opportunities to educate lawmakers about credit unions and this could increase support. They both said there needs to be more attention paid to the Senate side.
Donovan said spreading legislative priorities among several bills also makes sense because credit unions will be playing defense on many other issues. "On bankruptcy, overdraft protection and interchange fees, we will be defending policies that lawmakers will be trying to change, so we need to be nimble and not put our hopes on big bills that can be easily attacked," he said.