WASHINGTON — Prior to the House adjourning for the August recessJuly 29, the Senate agreed to just one of the provisions in thefinancial services regulatory relief proffer sent over by theHouse. The House proffer included a number of provisions requestedto be inserted into the Senate bill that contains significantlyfewer items than the House version (H.R. 3505). S. 2856 includesthe change in the definition of net worth for the merger accountingchange fix; extension of loan maturities from 12 to 15 years;permitting check cashing and wire transfers to nonmembers withinthe field of membership; and allowing low- and no-cost land leaseson military bases. The bill would also permit the Federal Reserveto decide whether or not to pay interest on Reg D reserves itholds. (See sidebar.) The proffer would also have authorizedprivately insured credit unions to join the Federal Home Loan BankSystem and clarified disclosure rules for these credit unions.Additionally, for thrifts, the House proposed eliminating the smallbusiness lending cap, which raised strong objections from CUNA.President and CEO Dan Mica wrote a letter stating that if thisprovision were accepted without parity for credit unions, the tradeassociation would oppose the entire bill. “We had a sense that[House Financial Services Committee Chairman Mike] Oxley was notfully involved in that proffer and once he learned all that was init, he was concerned,” CUNA Vice President for Legislative AffairsDean Sagar explained. As for the elimination of the thrift smallbusiness lending cap, he added, “I'm pretty certain it is off [thetable].” What the Senate did accept were some fair debt collectionitems backed by consumer groups. The House has a few weeks to workon negotiations as it is in recess until Sept. 5. While the Senatebill is not as expansive as the House bill, there are still gooditems in there for credit unions to push for legislation this year,according to Sagar. The check cashing and wire transfers for anyonewithin the credit union's field of membership is helpful tocompensate for some people's fear of the mainstream financialservices. Credit unions currently can only provide these servicesto members, but the service to nonmembers could also serve as agateway to bringing the unbanked into the financial mainstream andaway from predatory and payday lenders. Despite the expansion ofpower here, the banks have been relatively quiet about it. “I thinkthey realized they had lost it,” Sagar said. Not only are these thepeople banks have abandoned, he pointed out, but also the House hasalready passed stand-alone legislation to achieve this and SenateBanking Committee Ranking Member Paul Sarbanes (D-Md.) hadintroduced the same bill. The credit union provision that wouldchange the definition of net worth in the Federal Credit Union Actwould avoid unintended consequences of Financial AccountingStandards Board merger accounting changes that could put a damperon credit union mergers. “It's good to have that even without thedeadline looming,” Sagar said referring to FASB's announcedintention to delay the effective date of the changes another year.The loan maturities extension is particularly important for studentlending and refinancing of student loans given the rising cost ineducation these days, as well as business lending. Additionally,the lease of land for credit union branches on military bases was auseful clarification. Even though it does not include as manygoodies for credit unions and others as the House bill, the Senatebill could prove symbolic for credit unions. “The Senate regulatoryrelief bill was significant…What we saw in the Senate bill was aneffort to treat credit unions equally,” Sagar emphasized. It placescredit unions on equal footing with their for-profit brethren byproviding an equal number of provisions for banks, thrifts andcredit unions with approximately the same amount of relief. “Wewere finally given parity and we're going to keep it,” he added.Credit unions were not “an afterthought.” They have certainly madetheir voices–or at least e-mail addresses–known on Capitol Hillafter CUNA reported more than 10,000 communications sent to federallegislators recently on the bill. Sagar said he does expectregulatory relief to make it onto the books this year. “They'retired of passing bills and having it languish in the Senate,”Sagar, a former Financial Services staff member for the minority,observed. He also said that if it does get signed into law thisyear, it does not hurt the chances of other regulatory reliefefforts, including the Credit Union Regulatory Improvements Act(H.R. 3579)–a hearing for which is not likely to materialize thiscongressional session. But now that the Senate has dealt with theissues, it will be more familiar with them when they come up again.However, regulatory relief will not be as high a priority if theDemocrats win back the House, Sagar said. Both of the likely nextFinancial Services chairmen Barney Frank (D-Mass.) and SpencerBachus (R-Ala.) are more open to smaller bills over Oxley'sstrategy of pushing through larger packages. He also said that CUNAis not expecting to get a provision permitting all types of creditunions to be able to adopt underserved areas onto the bill. “We'vedrafted something and talked to some people about it in case theopportunity arose,” Sagar said. If anything were to happen on thatit would more likely occur during the anticipated lame ducksession. He also noted that there is a lot of interest inreformulating CURIA for next Congress.