WASHINGTON – The ping-pong match between the House and Senate over financial services regulatory relief has begun. Hike the Hills and regular staff contacts have turned up intelligence that a “proffer”-somewhere between a proposal and an offer, CUNA Vice President of Legislative Affairs Dean Sagar described-has been sent to the Senate. Though he has not seen the language, rumor has it that it would strike a provision defining a “broker” that was in the Senate language but not the House bill and add nine others. He said he believed there was fairly universal agreement on the broker provision and it may be used as leverage for trading on other provisions. One of the provisions requested as an addition to the Senate bill by the House has CUNA up in arms. CUNA President and CEO Dan Mica has written Senate Banking Committee Chairman Richard Shelby (R-Ala.), Ranking Member Paul Sarbanes (D-Md.) and the bill’s sponsor Mike Crapo (R-Idaho) encouraging them to reject the proffer based on Section 212 of the House proposal that would completely eliminate the thrifts’ cap on business lending but is silent on the credit union 12.25% cap. “This would severely damage the tenuous balance between federal thrift and credit union charters without comparable and offsetting benefits for credit unions either in the proposed compromise or in the broader Senate legislation,” he wrote. This also marks the first time the group has publicly opposed a legislative effort by the for-profit sector to expand their abilities to serve their customers. “It has been CUNA’s long-standing policy not to oppose any legislative or regulatory request by the bank and thrift industries to enhance their ability to serve their customers,” Mica wrote. “Unfortunately, the same courtesy has not been extended to credit unions by bank and thrift industry groups. CUNA has attempted for several years to obtain a modest increase in the 1998 limitation on credit union business lending, encountering strong opposition from the banks. Therefore, we view it as inappropriate for Congress to consider a substantial expansion in thrift business lending, and a significant enhancement of the thrift charter, within the context of Senate legislation that was intentionally drafted to avoid any disruption of the delicate balance between federal charters and regulators.” (See sidebar for further details on CUNA’s letter.) Another two of the nine proposed additions, Sagar said, are the provision to permit privately insured credit unions to join the Federal Home Loan Bank System and the clarifications to the Federal Trade Commission’s role in enforcing member disclosures for privately insured credit unions. House Financial Services Committee Chairman Mike Oxley (R-Ohio) is from the same state as American Share Insurance, the sole remaining private insurer. “This serves everybody’s interests, especially the public’s, to set a clear guidance out there,” he said. He added that consumer groups have indicated there could be a couple of items in there for them as well involving fair debt collection and the Community Reinvestment Act. “We’re just trying to get more details,” Sagar said. The Senate is expected to reject the proffer. NAFCU Director of Legislative Affairs Brad Thaler commented on the proffer he had heard rumor of, “I don’t want to speculate because these things can change pretty quickly.” However, NAFCU has come out strongly against private primary deposit insurance in the past. “We’ll let the process play out and see what happens,” he said. Financial Services Committee member and credit union friend Paul Kanjorski (D-Pa.) has also spoken out against private primary deposit insurance, as well as Senate Banking Committee Member Jack Reed (D-R.I.). There is no defined timeline for the legislation, Thaler said, but interest has been expressed in getting it done by the Fourth of July recess. “They’d like to get something done sooner rather than later,” he added.

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