Executives from Southern California credit unions voiced their approval of a bill introduced Friday by Rep. Gary Miller (R-Calif.) that would establish a risk-based capital system for credit unions and provide several other regulatory relief measures.
In a release from Miller’s office, Richard L. Harris, president/CEO of $1.2 billion Caltech Employees FCU said the bill is “filled with practical ideas on how to cut down on the number of needless regulatory compliance issues my employees deal with every day.” He added that the legislation is an excellent starting point for regulatory relief.
Debra Schwartz, president/CEO of the $2.4 billion Mission FCU said the bill would help credit unions manage today’s stringent regulatory environment.
“Our employees should be focused on serving consumers, whom we call members, and assisting them with their loans – not on keeping up with and implementing endless and often unnecessary government compliance.”
On the other end of the asset spectrum, Gary Nelson, president/CEO of the $69 million La Loma FCU in Loma Linda, Calif. said the bill would help ease the amount of onerous regulation credit unions face after the financial crisis.
“Rep. Miller understands that credit unions should be focusing on maintaining the flow of credit to our local communities instead of being caught up in government regulation aimed at bad actors in the financial services arena,” he said.
The Regulatory Relief for Credit Unions Act would:
- Allow the credit union’s prudential regulator, the NCUA, to grant federal credit unions a waiver to follow a state rule instead of a federal one in certain situations;
- Establish a risk-based capital system for credit unions akin to that of other depository institutions;
- Authorize the NCUA to step in where appropriate to delay application of, or slightly modify, a CFPB rule affecting credit unions to be sure such a rule recognizes the unique nature of credit unions while also carrying out the intent of the CFPB;
- Require that NCUA and CFPB revisit cost/benefit analyses of rules after three years so they have a true sense of the compliance costs for credit unions;
- Require the NCUA to conduct a study of the Central Liquidity Facility for credit unions and make legislative recommendations for its modernization;
- Provide credit unions parity with FDIC-insured institutions when it comes to deposit insurance coverage on Interest on Lawyers Trust Accounts; and
- Give credit unions better control over their investment decisions and portfolio risk.
Rep. Miller is also an original cosponsor of H.R. 1750, the Community Lending Enhancement and Regulatory Relief Act of 2013, which would provide regulatory relief to community banks.
“Credit unions and community banks should not be burdened by an overwhelming amount of regulation better suited for more complex institutions,” Miller said. “Instead of focusing on access to credit and other basic financial services, our local credit unions and community banks now have thousands of pages of rules they must comply with from the Consumer Financial Protection Bureau alone. This mounting regulatory burden hits credit unions and community banks particularly hard as they often lack the resources and personnel that larger financial institutions enjoy.”
Miller added that he looks forward to working with colleagues on the House Financial Services Committee, of which he is vice chairman, to ensure the regulatory environment promotes safety and soundness without stifling innovation and consumer choice.