On MBL and CRA: Hurry Up and Wait
That means credit unions may have to wait to see how two issues they are concerned about-increasing the amount of business loans credit unions can make and fighting efforts to expand the reach of the Community Reinvestment Act to credit unions-will be resolved.
Sen. Charles Schumer (D-N.Y.) has said he is still interested in pushing forward legislation that would lift the cap on MBL-currently 12.25% of total assets-but hasn't announced when it will be introduced and whether it would be a separate bill or part of a broader piece of legislation.
Lobbyists for CUNA and NAFCU said they are seeking ways to lift the cap but aren't sure it will happen this year. The politics of the issue are tricky because lobbyists for the banking industry strongly oppose the measure, and lawmakers are sometimes reluctant to pass a measure that favors one group at the expense of another.
A congressional aide said that Congress would likely package lifting the MBL cap on credit unions with a measure that benefits banks.
CUNA recently circulated a letter to lawmakers signed by several business groups that said the move would "cost taxpayers nothing and will provide much needed credit into our economy."
And credit union lobbyists are playing defense on CRA.
Rep. Eddie Bernice Johnson (D-Texas) introduced a measure earlier this year that would include credit unions with independent mortgage companies, mortgage company affiliates of banks, insurance companies and securities firms as part of a group of "nonbank institutions'' that would become subject to CRA requirements.
The bill would expand CRA to require CRA exams to consider how well a financial institution serves minorities as well as how well it serves low-and moderate-income groups. It would also require small business loan data to include information on the race and gender of the small business owner.
A spokeswoman for Johnson said she had been told that the House Financial Services Committee would hold hearings on the bill later this year. A hearing scheduled for last month was postponed. A committee spokesman said it doesn't announce hearings until a week before they are scheduled.
House Financial Services Committee Chairman Barney Frank (D-Mass.) has said he favors expanding CRA to credit unions but hasn't indicated a timetable for considering the legislation.
Lobbyists for CUNA and NAFCU said they constantly remind lawmakers that credit unions already do a great deal to serve the underserved and complying with CRA would be additional regulatory burden for credit unions.