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WASHINGTON-Credit unions have not often had the opportunity to rally behind their own proactive, freestanding legislation. Though the congressional session is shortened this year due to elections, lawmakers are expected to spend some time on the Credit Union Regulatory Improvements Act (H.R. 3579), at least in the House Financial Services Committee. “It’s something that goes beyond what’s in 1375, the original reg relief bill,” according to CUNA Senior Vice President of Governmental Affairs John McKechnie. “It addresses some of these really important issues that the committee initially felt were too contentious to put in the bigger bill but now can be dealt with in this bill.” CUNA Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn explained that the secondary capital issue had been raised twice as amendments to other bills but dropped because they were considered too controversial an issue. Even the credit union movement did not have a clear consensus on the issue. So CUNA began looking at why some credit unions wanted the ability to obtain secondary capital and it quickly became clear that concerns over Prompt Corrective Action requirements were the driving force, he said. Then, at last year’s Governmental Affairs Conference, NCUA Chairman Dennis Dollar raised the issue of risk-basing assets with regard to PCA, an issue that CUNA had already been looking at. The credit union trades had also been talking with Treasury officials on the matter, which resulted in Assistant Treasury Secretary Wayne Abernathy’s remarks at a Consumer Federation of America conference at the end of last year and an informal request for comments. During the legislative drafting process, it was decided that the new legislation for the risk-weighted assets would also include provisions to increase the member business lending cap to 20% as was permitted the thrifts in the Financial Services Regulatory Relief legislation; increase the minimum voting requirements for credit union to mutual conversions with added disclosures; and allow credit unions to lease unused office space in underserved areas, in addition to all the credit union provisions in the Financial Services Regulatory Relief bill. “We could have thrown everything but the kitchen sink into a bill, just have an entire wish list of everybody in the credit union movement, but if we had done that, the bill would not have been taken seriously,” Kohn explained. This was important to the bill’s authors, Congressmen Ed Royce (R-Calif.) and Paul Kanjorski (D-Pa.), as well as CUNA. The bill has already attracted six official co-sponsors with another half-dozen poised to sign on in the near future. Royce and Kanjorski are penning a `dear colleague’ letter encouraging fellow lawmakers to become co-sponsors. CUNA has created an issue brief for credit union representatives to study and bring with them on Hill visits during GAC this week focusing on both CURIA and the regulatory relief bill. CUNA President and CEO Dan Mica also wrote his former colleagues urging their co-sponsorship of the bill. NAFCU President and CEO Fred Becker encouraged member credit unions to visit their members of Congress while they were in their districts for the President’s Day recess last week. NAFCU Senior Legislative Representative Murray Chanow made the point that over half of the House committee members were not in Congress when H.R. 1151 passed, so it’s important to educate those members on credit unions and why they are different from banks. “CURIA is a very good bill,” NAFCU General Counsel Bill Donovan said. “Congressman Royce and Congressman Kanjorski took a solid package of credit union regulatory relief provisions that were contained in section 301 in the long-standing reg relief bill and then added to that provisions that would go an awful long way toward giving credit unions the tool to do what they need to do to meet member needs in a rapidly changing market.” He added that the member business lending provisions and the risk-based net worth provision were common sense modifications. Though lobbyists are optimistic the bill will become law eventually, no one really thinks it will happen this legislative session. “As far as credit union legislation is concerned,” Donovan said, “the fact that we’re now moving into a presidential election cycle is going to alter the politics of moving legislation.” However, hearings are expected in the spring, which would bring it one step closer to becoming law. Donovan pointed out that it is significant that the co-authors of the bill are known as legislators that are familiar with credit union issues. Royce’s support dates back to his days in the California assembly and Kanjorski as one of the authors of the Credit Union Membership Access Act of 1998. Also demonstrating the bill’s significance is that CUNA, NAFCU and NASCUS have already met at Credit Union House earlier this year to discuss strategy for CURIA as well as H.R. 1375. “This is a manifestation of not only the credit union movement’s willingness to be assertive about the things that are important for our members, but I think it’s also an indication that Congress realizes that the credit union movement has issues that need to be dealt with in a positive way rather than in a defensive rescue bill like H.R. 1151 was,” McKechnie said. [email protected]

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