At press time, the House Financial Services Committee was close to passing a bill extending the National Flood Insurance Program for five years and three bills to make changes to the structure of the Bureau of Consumer Financial Protection.
CUNA and NAFCU supported the flood insurance measure and backed an amendment by Rep. Frank Lucas (R-Okla.) that would clarify existing law to allow lenders to collect premiums for force-placed flood insurance during the 45-day notification period if a borrower allows the policy to lapse. The amendment passed on a voice vote.
The trade associations contend that the clarification is needed because credit unions participating in the program assume the risk of property damage during the notification period.
The panel was also likely to approve bills that would make several changes to the consumer bureau, which is supposed to begin operation in July. The changes would have the bureau run by a five-member board rather than a director; allow the bureau’s decisions to be overturned by a majority vote of the Financial Stability Oversight Council rather than two-thirds; and delay the startup of the bureau until a director is in place.
CUNA didn’t take a stand on the bill about how the bureau should be governed, while NAFCU supported the measure.
Committee Republicans, who backed the change, noted that Democrats had originally supported having the board governed by a five-member panel. The financial overhaul bill originally passed by the House contained that structure, but it was changed in the Senate to have the bureau run by a director.
NAFCU supported the measure to change the number of votes needed to overturn a regulation approved by the bureau, and CUNA didn’t take a position.
Under current law, the Bureau of Consumer Financial Protection will be an independent agency housed inside the Federal Reserve and run by a director appointed by the president and confirmed by the Senate. President Obama hasn’t nominated a director but has named Harvard Law Professor Elizabeth Warren to be in charge of the agency’s setup.
The positions on the changes to the bureau have broken down along party lines, with the GOP supporting them and Democrats against them. The Republicans have a majority in the House, and the bills will likely pass in that chamber. However, Democrats who control the Senate have shown little appetite for the legislation. But Senate Republicans said they would block the confirmation of a director for the bureau unless substantial changes are made to its structure.