<p>WASHINGTON-Like a good parent admonishing their child to worry about their own behavior and not a sibling's, so House Financial Services Financial Institutions Subcommittee Chairman Spencer Bachus (R-Alabama) told the bankers at a subcommittee hearing on regulatory relief April 25. In testimony before the subcommittee on regulatory relief, banks seemed less concerned about what would benefit them in H.R. 3951 and more concerned about what credit unions would be getting out of the deal. While the bankers complained of efforts to "enhance the competitive position of credit unions over [their] taxed competitors," as South Trust Bank President Elizabeth Duke, representing the American Bankers Association, (ABA) did, Congressman Bachus compared the arguments to a food fight, saying that "they're not constructive" and adding that lawmakers were looking for a favorable solution for all concerned. "We do not want to do anything in this bill to give a credit union an unfair advantage." Bachus said. "The arguments do not have as much substance as they should." He pointed out that credit unions already used the Federal Home Loan Bank (FHLB) System and that the legislation would only permit privately insured credit unions to join the system and said he did not understand why they should not be allowed. Bachus added that he could not be accused of favoring the credit unions after he voted against H.R. 1151. Credit union representatives stuck to what they wanted from regulatory relief rather than arguing what the banks should not get. However, Xerox Federal Credit Union President and CEO Bill Cheney, who testified on behalf of NAFCU, did note in the five minutes each industry representative was given to speak, "Credit unions have been under assault by the banking industry for nearly two decades." In his comments, he said that NAFCU supported provisions to expand credit union investment authorities, the ability for credit unions to voluntarily merge, extend the 12 year loan maturity limit to 15 years, broaden credit union service organization investment abilities, permit check cashing for nonmembers within a credit union's field of membership, and land lease provisions regarding military bases. NAFCU remained noticeably silent on the provision to permit privately insured, state chartered credit unions to join the FHLB System. The trade organization has questioned the wisdom of this before, given the past experience with private insurance failures. NAFCU's main focus and constituency is the interest of federally chartered credit unions, all of which must be federally insured. On the other hand, CUNA's representative, Eastern Panhandle Community Federal Credit Union Manager Charlene Gaither, came right out in support of that measure, along with the other credit union provisions. She pointed out that these institutions fell under the purview of the regulators in that state, as well as the oversight of the private insurance provider, and were subjected to similar requirements as their federally insured brethren. CUNA and NAFCU each sought other amendments to the legislation in line with their individual legislative initiatives. CUNA, under the guidance of its Renaissance Commission recommendations, supported the right of credit unions to use alternative capital in their net worth calculations. Gaither emphasized an amendment offered by Congressman Brad Sherman (D-Calif.) in the deposit insurance legislation debate that would have done just that. The "amendment was introduced, discussed, then withdrawn. While some consideration was given to reintroducing the amendment at the full committee markup, out of deference to the chairman, it was not," she explained. The issue might be raised again during the markup of the regulatory relief legislation. NAFCU recently changed its position on additional capital to support its use. CUNA's board is working to clarify their stance on additional capital, Gaither, conspicuously from bill author Representative Shelley Moore Capito's (R-W.V.) home state, said. "[A]ny form of alternative capital must not compromise the cooperative nature of credit unions. This capital must not give its holder any voting or control rights," she said. The ABA raised this issue in a recent letter to Congress, stating that alternative capital would change the unique structure of credit unions. Additional recommendations from CUNA's written testimony includes providing credit unions with simpler means of expelling members, allowing directors and supervisory committee members to obtain loans under $50,000 without board approval, permitting reasonable volunteer reimbursement for expenses, allowing credit unions to establish board term limits, permitting credit unions to lower interest levels in loan participations, and allowing credit unions to sell wire transfers within their fields of membership. Cheney also made additional recommendations from NAFCU's `guiding principals' to enhancing the federal charter. He asked for: </p> <p>credit unions to be exempt from premerger paperwork in the Hart-Scott-Rodino Act; </p> <p>elimination of the usury ceiling; </p> <p>removal of the term "local" in front of community for granting community charters; </p> <p>eliminating the preference for creating a new credit union rather than joining an existing one; </p> <p>relaxing the "reasonable proximity" language when adding new groups to acknowledge changing technology; </p> <p>easing member business loan restrictions; </p> <p>permitting use of additional capital; and </p> <p>giving NCUA greater discretion over credit union governance procedures. [email protected]</p>