Dodd Reiterates Pledge
"I want to make it clear that this does not relate to credit unions. Before I get calls from around the country, I wanted to make that point: Credit unions, you are OK," Dodd (D-Conn.) said at a hearing last Tuesday on his bill, in response to a question from Sen. Jeff Merkley, (D-Ore.).
House Financial Services Committee Chairman Barney Frank, D-Mass., has also expressed support for keeping the NCUA separate as has the Obama administration.
On Wednesday, Dodd said he was hoping that there would be a final vote by January in his chamber on the measure to revamp the way financial services are regulated Previously, Frank said he hopes to move the legislation through the House by the end of the year.
One of the biggest sources of concern for credit unions is the administration's proposal to create a Consumer Financial Protection Agency to regulate financial products. Frank has said he plans to mark up the measure later this month.
Both CUNA and NAFCU reiterated their concerns about the proposal in letters to Frank and the panel's ranking Republican, Spencer Bachus of Alabama.
CUNA President/CEO Dan Mica said mandating that credit unions be examined by the NCUA and the new agency could result in receiving "conflicting guidance from their safety and soundness examiner and the CFPA." He added that this shows "the structural problem that the legislation creates by subjecting credit unions to examinations by entities with different core interests."
Mica also expressed concern that including credit life and credit disability insurance as covered products would add a compliance burden for credit unions. He suggested banning single-premium credit insurance products in connection with residential mortgage loans.
NAFCU Executive Vice President Dan Berger raised a similar point about insurance in his letter and said the new agency shouldn't regulate insurance products because "insurance is not an extension of credit but rather protects against the risk of loss. The fact that some insurance covers the risk surrounding a credit transaction doesn't alter the essence of the insurance product."