Rep. Gary Miller (R-Calif.) introduced the Regulatory Relieffor Credit Unions Act Friday, a bill that would establish arisk-based capital system for credit unions.

“This bill represents a way forward on risk-based capital thatwe believe can get Congressional support,” said incoming NAFCUPresident/CEO Dan Berger.

CUNA President/CEO Bill Cheney said in a letter to Millerfollowing the bill's introduction that the current credit unioncapital regime was imposed on credit unions in 1998, and itincludes leverage ratios and other restrictions that are hardwiredinto the statute.

“There are many lessons to learn from the 2008-2012 bankingcrisis, including the importance of capital and the importance ofhaving regulators equipped to respond to crisis,” he said. “Yourlegislation would amplify the NCUA's authority to implement arisk-based capital regime and provide NCUA the flexibility toadjust leverage requirements.”

The bill would also give the NCUA the ability to adjust capitalrequirements when necessary, Cheney said.

“The authority proposed by your legislation is designed toproduce capital rules similar to those that small banks in theUnited States must follow,” he said.

The bill also included additional directives for the NCUA,including the ability to appropriately modify CFPB regulationseffecting credit unions, provide deposit insurance coverage onInterest on Lawyers Trust Accounts, grant federal credit unionsa waiver to follow state regulations in some situations, andrequire both the NCUA and CFPB to review cost-benefit analysis ofrules three years after they go into effect.

The legislation would also direct the Government AccountabilityOffice to study the need for improvements and modernization of theCentral Liquidity Facility.

“As the credit union system and its regulatory regime haveevolved, the CLF has not proved to be essential to natural personcredit unions in dealing with their own liquidity needs,” Cheneysaid. “Nevertheless, as we saw during the financial crisis, afacility that permits the NCUA and/or the NCUSIF to borrow from thefederal government during stressful times is essential. Therefore,an examination of how the CLF might be modernized with the goal ofmeeting system liquidity needs into the future is appropriate.”

As expected, the bill did not include any provisions related tomember business lending or supplemental capital. Those issues havealready been addressed by two separate bills introduced earlierthis year.

“With member business lending addressed as part of H.R. 688, the'Credit Union Small Business Jobs Creation Act,' and supplementalcapital addressed in H.R. 719, the 'Capital Access for SmallBusinesses and Jobs Act,' this bill becomes the thirdmajor credit union specific proposal from our five-point plan forcredit union regulatory relief to be offered in the House thisCongress. We are pleased that the concept of regulatory relief forcredit unions continues to gain Congressional support,” said NAFCUVice President of Legislative Affairs Brad Thaler,