WASHINGTON – While the Senate Banking Committee's version of regulatory relief is not as far-reaching as the House bill, credit union and bank lobbyists are shining a positive light on it as a good step.

Lawmakers and financial services interests are hoping the bill will speed right through the Senate and to the president's desk. “It looks like it [will]. It had broad-based bipartisan support,” NAFCU Director of Legislative Affairs Brad Thaler said of the bill that passed through the 20-minute committee markup May 4 by voice vote.

NAFCU has sent individual letters to the Senate Majority Bill Frist (R-Tenn.) and Minority Leader Harry Reid (D-Nev.) asking them to move quickly on the Financial Services Regulatory Relief Act of 2006. “[W]e urge you to bring the Banking Committee approved Financial Services Regulatory Relief Act of 2006 to the floor of the Senate and pass it expeditiously under a unanimous consent agreement if at all possible,” President and CEO Fred Becker wrote.

Independent Community Bankers of America Senior Vice President and Director of Congressional Relations Group Steve Verdier remarked, “It's got some regulatory relief in it for us.Certainly I'm not going to say they're the most significant provisions.”

CUNA President and CEO Dan Mica also said his group was disappointed in the narrowness of the Senate bill, but thankful for what did make it in. He added, “Other financial services entities and regulators no doubt share our disappointment on this limited package. That is all the more reason to expect additional efforts at regulatory relief for credit unions and other financials in the future.”

For credit unions, the bill permits minimal lease costs on federal facilities, amends the definition of net worth to avoid an unintended consequence of an accounting rule change, extends the general loan maturity limit from 12 years to 15, and permits check cashing and wire transfers to anyone within the field of membership.

Three of the banking provisions in the current bill are from the Communities First Act, a community bank specific regulatory enhancement bill, Verdier pointed out. The national bank provisions in the Senate Banking Committee's Financial Services Regulatory Relief Act cover voting in shareholder elections, simplifying dividend calculations, and repealing a couple of obsolete laws.

Savings associations would receive equal treatment under securities and investment laws, repeal duplicative mortgage servicing rule, clarify citizenship of thrifts for federal court jurisdiction and repeal the limit on loans to one borrower.

There are also numerous generic financial services provisions, including permitting the Federal Reserve to pay interest on Reg D reserves and initiating a study of potential efficiencies in Currency Transaction Report filing.

After the markup, the financial services trade associations were postulating on the present and future of regulatory relief. “We are hopeful that there might be a conference between the House and Senate,” America's Community Bankers Executive Vice President and Managing Director of Government Relations Bob Davis commented. House Financial Services Committee Chairman Mike Oxley (R-Ohio) has said he hopes to avoid a conference on the bill, but until it is a done deal anything can happen in Washington. However, ACB is first focusing on getting the Senate Banking Committee version of the bill through the Senate.

Verdier said he is unsure when the bill will come before the entire Senate, but, “Time is not a factor when you've got a bill that everyone agrees to.” Not many legislative days are left before election season gets into full swing.

Mica also said that comments from committee chairman Richard Shelby (R-Ala.) and Ranking Member Paul Sarbanes (D-Md.) gave him hope that “easing the regulatory burden on credit unions is on the radar screen of the Senate, and likely the Congress.” Sarbanes has announced he will retire at the end of this session of Congress.

“Every year there will be a regulatory relief bill in process somewhere,” Davis said. Even if the broader House bill passes, there would be more work to be done, he explained, such as Sarbanes-Oxley relief for smaller entities just to name one.

Whoever is named the next chairman of the House Financial Services Committee-since Oxley has also announced his retirement at the end of the 109th Congress-could affect how high a priority regulatory relief is. CUNA Vice President of Legislative Affairs Dean Sagar said that if Ranking Member Barney Frank (D-Mass.) becomes chairman he probably has other matters he wants considered first. If Republicans maintain control of the House then a resurrection of regulatory relief issues is more likely.

While ICBA has said it was happy with the provisions that are likely to become law, the group will begin looking strategically at the Communities First Act's other 12 provisions in the fall in preparation for the 110th Congress. A continued push for CURIA is no different in credit unions' eyes. Verdier said that this strategy of pushing a sector-specific bill and then adding its provisions to other vehicles was a wise choice for the community banks and for the credit unions.

But do not expect the bankers to work with the credit union trades on regulatory relief anytime soon. He commented, “We have obviously some significant problems with the more difficult points of the Credit Union Regulatory Improvements Act.”

ACB's Davis said his organization responds to the requests of its own membership. “As a general matter within the banking industry, we have focused on areas that affect banks and savings associations,” he said. -scooke@cutimes.com

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Limited Senate Banking Version of Reg Relief a Start, CUs and Banks Say

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