Senate Gives CUs the Cold Shoulder
Credit union trade associations shrugged off a 2014 budget amendment passed by the Senate March 22 that would “establish a deficit-neutral reserve fund to address the disproportionate regulatory burdens on community banks,” according to a release from sponsor Sen. John Boozman (R-Ark.).
Credit unions were not mentioned anywhere in the amendment’s language.
CUNA Vice President of Legislative Affairs Sam Whitfield said the amendment only represents the sense of the Senate and added that “those amendments never go anywhere.”
Brad Thaler, NAFCU’s vice president of legislative affairs, called the amendment vote symbolic and said it could be viewed as a positive development that shows the Senate has an appetite for regulatory reform. While NAFCU would like to have seen credit unions included in the amendment, Thaler said the affirmative vote helps lay the groundwork for advancing an overall regulatory reform agenda that would include credit unions.
“Based on our conversations with members of the Senate, if they tackle regulatory relief, it would include both credit unions and community banks,” Thaler said.
Independent Community Bankers Association spokeswoman Jessica Etter said her trade association didn’t lobby for the amendment and declined further comment.
Rather than attempt to get in on the amendment action, Whitfield said CUNA is instead focusing on upcoming hearings by the House Financial Services Committee that will investigate regulatory burdens on community financial institutions.
“Those will be real hearings that will have the potential to have the effect of law, as opposed to the sense of the Congress,” he said, “and we hope to be there front and center.”
A Financial Services Committee spokesman told Credit Union Times the committee plans to focus a future regulatory burden hearing on credit unions. However, Whitfield said the committee has not contacted CUNA asking for witnesses or testimony from credit unions for upcoming hearings on the topic scheduled for April 10 and April 16. Thaler said NAFCU hasn’t heard from the committee either, and said staffers could be ironing out the details while Congress is on a two-week break for Easter.
Boozman’s amendment was had bipartisan sponsorship support from Arkansas’ other senator, Democrat Mark Pryor, as well as Republican Jerry Moran of Kansas and Democrat Joe Manchin of West Virginia.
CULAC contributed $2,000 to Boozman in 2012, according to website opensecrets.org. The same site reported that NAFCU’s PAC did not contribute to Boozman during the 2012 cycle. During the 2010 election cycle, when Boozman was first elected, NAFCU donated $1,000 to his campaign, and CULAC donated $1,500. However, both trade associations also supported Boozman’s opponent during the primaries, with Lincoln receiving $3,500 from CUNA’s PAC and $1,000 from NAFCU.
The amendment would also fund, in the federal budget, policies that would ease regulatory burden on community banks.
Another amendment attached to the Senate’s 2014 budget would put an end to funneling Fannie Mae and Freddie Mac guarantee fees toward deficit reduction. Amendment #593, sponsored by Senate Banking Chairman Tim Johnson (D-S.D.) and Ranking Member Mike Crapo (R-Idaho), received a thumbs-up letter of support signed by CUNA and NAFCU, as well as banking and real estate trade associations.
“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from faulty loans, and should be used only to manage the companies’ credit risk. Increasing g-fees for other purposes effectively taxes potential homebuyers and consumers wishing to refinance their mortgages.” the groups said in the March 22 letter.
The Senate resolution passed by a narrow 50-49 vote.