<p>WASHINGTON-Credit unions received even more relief from unnecessary regulations in the Financial Services Regulatory Relief Act (H.R. 3951) following its markup in the full Financial Services Committee. The markup passed out of committee unanimously by voice vote. All of the credit union provisions previously included in the bill were preserved with the addition of two others. Two provisions added during the markup include one introduced by Congressman Doug Ose (R-Calif.) that would allow credit unions to perform wire transfers for potential members within their field of membership and another by Representative Steven LaTourette (R-Ohio) to allow NCUA to have more discretion over the usury ceiling. Under the bill, NCUA would only have to consider one or the other prong of a currently two-pronged test in determining the maximum interest rate credit unions can charge members for loans. The day before the markup, NAFCU wrote a letter to committee members stating, "Federal credit unions are the only type of insured institutions subject to federal usury limits on consumer loans. Credit unions are often a borrower's best safeguard against going to a predatory lender, and although counterintuitive, failing to give NCUA the authority to adjust the usury ceiling could under certain economic conditions have the real potential to drive marginal borrowers to predatory lending institutions." Congressman John LaFalce (D-N.Y.) also made an amendment to an existing provision in the bill clarifying that credit unions could only invest in "investment grade" securities, and not "junk bonds." One amendment that affects all financial services is one that would require financial institutions to notify an individual when a negative report is submitted to a credit reporting agency. "The point to emphasize is that it was an extremely good day for credit unions," CUNA Vice President and Senior Legislative Counsel Gary Kohn remarked. "We preserved all the items that were already in the bill for credit unions and we added some more." NAFCU Director of Legislative and Political Affairs Brad Thaler echoed Kohn's remarks. "We were pleased. We believe the legislation in the package is a good step toward the efforts we've been working on for the last few years on Capitol Hill to enhance the federal charter," he said. NCUA Chairman Dennis Dollar commented in a prepared statement, "We believe the statutory changes proposed in this bill will result in a more effective regulatory environment which recognizes the changing marketplace financial institutions operate in today while still keeping its primary focus on our first goal of safety and soundness. "NCUA appreciates the even-handed assessment the Committee made of NCUA's recommendations and those affecting the institutions we charter, regulate, and insure. We look forward to continuing to serve as a resource to Congress as this bill makes its way through the legislative process toward enactment." In the initial stages, House Financial Services Committee Chairman Mike Oxley (R-Ohio) asked the federal financial regulatory agencies to make recommendations for provisions in the bill. An amendment offered by Congressmen Bob Ney (R-Ohio) and Brad Sherman (D-Calif.) to allow credit unions to use secondary capital in their net worth calculations was introduced and withdrawn again, as it has been earlier in the regulatory relief legislative process. "Of course, we're disappointed that we weren't able to get the Ney-Sherman provision in on secondary capital. However, that debate has come a long way in a very short period of time," CUNA's Kohn was quick to point out. "I think that there is a realization on our part that this bill will not become law this year anyway so it has set us up for being able to reflect our discussions on that particular issue in an effort to try to get it in the bill when it's reintroduced next year." LaFalce, an author of H.R. 1151, was one of the primary opponents to the secondary capital amendment. Additionally, there were unsuccessful attempts by usual-credit union friend LaFalce to remove the faith-based business lending provision, which would exclude these loans from the member business lending cap, and the provision allowing privately insured credit unions to join the Federal Home Loan Bank System. Credit union lobbyists were not surprised at LaFalce's reaction to these credit union-friendly provisions, saying that they had been aware of his position on them for some time. "That (faith-based member business lending) was part of a bigger picture for him. He felt that there were enough credit union provisions that were discussed and several that were not that should have been handled separately as part of a total package," Kohn explained. "We understood and appreciated his thoughts that the member business lending cap deserves further review," Thaler said, "but we disagreed with his reasoning that you shouldn't do it one step at a time." Even having to work against a normal credit union ally, credit union trade associations are still optimistic about the bill's ultimate outcome. "There was a lot of work put into this," Kohn said. "We think it's paid off in big way. We're very pleased with how it went and we think that we're set up very nicely for next year when this all comes back." The bill's next stop on the legislative train is the House Judiciary Committee, where Thaler said little debate is expected before it passes out of committee and moves to the full House for a vote. House consideration is expected before the July 4th recess. "We expect the legislation would be able to be approved [in the House] by a fairly easy margin. The real question mark for the bill remains in the Senate." he said. He admitted that Senate Banking Committee Chairman Paul Sarbanes (D-Md.) has remained "cool" to addressing regulatory relief legislation in the Senate. Senator Richard Shelby (R-Alabama) is reportedly kicking around the idea of introducing a parallel bill in the Senate. Thaler pointed out that some provisions could be attached to other pieces of legislation this year. "You never know with a big omnibus bill what could get thrown in there," he commented. If the bill does not become law this year, it will have to start anew at the start of the next congressional session in 2003 after the elections. [email protected]</p>