The House Financial Services Committee Thursday approvedlegislation that would exempt virtually all credit unions fromCFPB rules.

Voting 30-25, the committee approved H.R. 1264, which wouldexempt all financial institutions with less than $50 billion inassets from CFPB rules.

In speaking against the bill on Wednesday, Rep. Maxine Waters(D-Calif.) ranking member of the committee, said the bill wouldexempt all but one credit union from bureau rulemaking. “This isunacceptable,” she said.

She did not identify the credit union, but Navy Federal CreditUnion has almost $84 billion in assets.

Bill sponsor Rep. Roger Williams (R-Texas) said that the CFPBhas not exercised its authority to exempt small institutions fromits rules. His legislation would allow the CFPB to ask bankingregulators for permission to waive the exemption if bureauofficials believe it is warranted.

“One size, believe it or not, does not and should not, fit all,”he added.

Williams accused the CFPB of “bureaucratic over-reach.”

But Waters said the legislation would weaken oversight offinancial institutions, adding that former CFPB Director RichardCordray did exercise the exemption authority.

NAFCU and CUNA supported the legislation.

“If the CFPB is unwilling to tailor its rules using its existingauthority, Congress should require it to do so through thislegislation,” CUNA President/CEO Jim Nussle said in a letter to thecommittee.

But it might be difficult to get the bill through the Senate,where Democratic supporters of the CFPB could move to block it.

The bill was one of 15 bills approved by the committee. TheHouse already has passed Financial Services Chairman JebHensarling's (R-Texas) Financial CHOICE Act, would overhaul theDodd-Frank Act.

The Senate is not expected to consider Hensarling's bill.Instead, Senate Banking Chairman Mike Crapo (R-Id.) and abipartisan group of senators have crafted a more modest regulatoryoverhaul bill.

Waters said that several of the bills approved by the FinancialServices Committee were part of Hensarling's bill and were includedin the Senate bill.

She called the measures “misguided,” adding that they wouldweaken important components of Dodd-Frank.

During the markup, the committee also approved H.R. 4607, whichwould require financial regulators, including the CFPB and the NCUAto review all regulations once every five years.