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WASHINGTON-Representatives from NCUA and NASCUS testified yet again Sept. 22 on regulatory relief legislation, this time with Hurricane Katrina in hindsight. The Financial Services Regulatory Relief Act (H.R. 3505), which the House Financial Institutions and Consumer Credit Subcommittee held a hearing on, has enjoyed broad bipartisan support on Capitol Hill. The credit union lobby favors the bill but is working, with NCUA, to get Prompt Corrective Action reforms into the bill. NAFCU Director of Legislative Affairs Brad Thaler said he expects to see a markup of the bill by the end of October. “NCUA does strongly support these provisions,” NCUA General Counsel Bob Fenner told the panel. He highlighted Section 307, the provision allowing a credit union to provide check cashing and wire services to anyone within its field of membership, as particularly important to serving the underserved and courting the unbanked into the financial services community. Fenner also “respectfully urged” the subcommittee to amend the bill to include NCUA’s proposal for Prompt Corrective Action reform. The current system, he said, penalizes low-risk credit unions and makes credit unions hold onto unnecessary capital. Virginia’s deputy credit union regulator George Latham testified on behalf of NASCUS. The group asked for key capital reforms, such as PCA relief, amending the net worth definition and providing for alternative capital. He also applauded the power given to state regulators to oversee certain aspects of the privately insured credit unions’ deposit insurance disclosures that have been added the legislation this cycle. Another new item on the bill is aimed at reducing redundant and unnecessary Bank Secrecy Act filings.

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