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WASHINGTON-CUNA submitted a laundry list of suggestions to make possible regulatory relief legislation more meaningful for credit unions just as the decision was made to keep the bill whole. House Financial Services Committee Chairman Mike Oxley (R-Ohio) had floated the idea of separate regulatory relief bills for the banking industry and the credit union community. While trade associations on both sides danced around the suggestion, no one was happy with it. Credit union trade groups did not want to face another banker attack on yet another front, as they undoubtedly would have with a separate bill and nothing to stop the bankers. On the other hand, the bankers said they had their plate full this congressional session with potential privacy legislation, deposit insurance reform, and their fight to get into real estate, among other issues. “After various discussions, they realized that a single bill was the best route to take on regulatory relief.I think there was a consensus that, under the circumstances, it would be best to move it as a single bill and that that would be the least likely to cause a big problem,” CUNA Vice President and Senior Legislative Counsel Gary Kohn said. Oxley and others decided to keep the regulatory relief legislation in the same form it was in the 107th Congress. The bankers may still oppose the credit union provisions, but there are still some nuggets for them to mine from the bill. Last year, the American Bankers Association withdrew its support from the bill, but did not oppose it because of the credit union provisions. Americas Community Bankers and the Independent Community Bankers of America supported the bill, but attacked the credit union provisions during hearings. CUNA SVP of Government Affairs John McKechnie said a single bill is probably better because a separate CU bill would have been an easy banker target, though McKechnie says the bankers will still fight hard against the CU provisions. McKechnie believes that the bankers hurt themselves by not supporting the bill last session because of reg-relief for credit unions, while credit unions took the high road when it came to banker reg-relief and continued to support the bill. McKechnie said he heard of one banker saying reg-relief should not apply to CUs because of their tax status. “If that’s the case, what about Subchapter S banks?” he asked. In preparation for the reintroduction of the regulatory relief bill in the 108th Congress, CUNA submitted a list of 15 different suggested amendments to Chairman Oxley. “As you know, credit unions remain the most highly regulated and restricted of all insured financial institutions, particularly after the passage of the Credit Union Membership Access Act, which, while it resolved some very important issues, also imposed new, severe restrictions on credit unions in several areas,” CUNA President and CEO Dan Mica wrote in the letter. “We are, therefore, extremely grateful that last year’s regulatory relief bill included important relief that will help credit unions fulfill their mission and provide greater service to their members.” CUNA’s recommendations included: *eliminating the 12.25% member business lending cap; *allowing credit unions to use secondary capital toward prompt corrective action net worth requirements; *allowing credit unions to continue adding members from original groups after converting to a community charter; *counting ATMs as an acceptable service mechanism for adopting underserved areas; *dropping PCA net worth requirements by 1%, in line with other financial institutions; *allowing NCUA to set the limit on federal credit unions’ investment in and loans to credit union service organizations; *permitting NCUA to write appropriate investment limit rules; *removing the FOM select employee group size (3,000) and language to encourage the formation of a new credit union before the addition of a SEG; *deleting the federal credit union governance provisions in the Federal Credit Union Act; *eliminating the requirement that only one NCUA Board member can have credit union experience; *allowing NCUA to write consumer and mortgage lending rules; *eliminating credit unions’ usury ceiling; *giving NCUA authority to determine “underserved areas;” *permitting credit unions to make member business loans unless they are significantly undercapitalized (4% or less); and *changing the definition of a “new credit union” to one that has been in operation for less than 10 years with less than $20 million in assets. “It is my hope that this bill will be the first installment in a continuing effort to eliminate unnecessary and burdensome rules and regulations for credit unions and others,” Mica’s letter concluded. “The first two items in there-changes to the cap in member business loans and the other one would be some form of alternative capital-are the most substantive,” Kohn remarked. “I would think that we probably have a better shot at the first one, the change in the member business loans than the alternative capital. That still may require some additional work before there’s a consensus on how and when to proceed on that.” He noted that the provision setting thrifts’ business lending cap at 20% could work to credit unions’ advantage in a parity argument. Kohn also commented that he believed Oxley was sympathetic that the differing levels should be reconsidered. [email protected]

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