When it comes to the level of regulation of banks and credit unions, CUNA President/CEO Bill Cheney and NAFCU President/CEO Fred Becker plan to tell lawmakers on Wednesday that less is more.
Both trade association chiefs are endorsing parts of a bill that would provide regulatory relief to banks but want more benefits for credit unions.
They are also using the occasion of a joint hearing of the House Financial Services Committee’s Subcommittee on Capital Markets and Government Sponsored Enterprises and the Subcommittee on Financial Institutions and Consumer Credit to make another pitch to raise the cap on member business loans.
Cheney plans to tell lawmakers that credit unions and banks “face a crisis of creeping complexity related to regulatory burden’’ and that both need relief.
The bill is sponsored by Rep. Blaine Rep. Blaine Luetkemeyer (R-Mo.) and has 47 cosponsors, including House Financial Services Committee Chairman Spencer Bachus (R-Ala.). Sen. Jerry Moran (R-Kan.) has introduced a companion bill in that chamber. Bachus isn’t a cosponsor of the bill to raise the cap on member business lending.
Luetkemeyer, a former community banker, has been a strong critic of credit unions. When he won his seat in Congress in 2008, CUNA’s political action committee spent $184,021 on advertisements and brochures on behalf of his opponent, state Rep. Judith W. Baker, a Democrat.
Cheney plans to urge lawmakers to include credit unions in provisions such as one exempting small banks from certain data collection requirements and making it easier for the Financial Stability Oversight Council to overturn regulations of the Consumer Financial Protection Bureau. Becker touches on a range of issues, many of which are beyond the scope of the Luetkemeyer bill. He plans to urge lawmakers to change the law to allow credit unions to accept supplemental capital from their members and to add underserved areas to their field of membership, regardless of their charter type.
Becker and Cheney both also plan to criticize provisions that assist Subchapter S banks, including doubling the maximum number of shareholders from 100 to 200 and expand eligibility for banks to be classified that way. “One estimated value of the Subchapter S federal tax break for banks is $2.05 billion for 2010, which is significantly greater than the estimated value of the entire credit union tax expenditure, $1.27 billion,’’ Becker says in his testimony.
Cheney also notes that while CUNA is supportive of regulatory relief for banks, when credit unions ask for similar help banks routinely “mislead Congress with misinformation regarding the credit union charter and mission.’’
The hearing is scheduled to be streamed online live beginning at 2 p.m. on Wednesday.