WASHINGTON — Six years of work on the Financial Services Regulatory Relief Act culminated in its signing into law Oct. 13, but left financial services lobbyists hungry for more.

Though the legislation has now become the law of the land, lobbyists admit it is certainly not nearly all they had hoped it would be. An expansive piece of legislation overwhelmingly passed the House on a few occasions, but the Senate could only manage to cobble together a handful of lackluster provisions for each sector of the financial services industry that all could agree on.

The law includes provisions permitting credit unions to offer wire transfers and check cashing to potential members, which NCUA planned to implement at its Oct. 19 meeting via interim final rule; allowing for low- to no-cost leases on military bases; increasing the general loan maturity from 12 to 15 years, also in NCUA's interim final rule; changing the definition of net worth in the Federal Credit Union Act to correct an unintended consequence of merger accounting changes expected from the Financial Accounting Standards Board; and cleaning up the private insurance disclosures from the Federal Deposit Insurance Corporation Improvement Act. Additionally, it would permit the Federal Reserve Board to begin paying interest on Reg D “sterile” reserves in 2012.

“The common sense reforms now contained in the law are an important building block for developing a more robust and competitive marketplace for credit unions and other financials, and particularly for the benefit of their members and customers,” CUNA President/CEO Dan Mica commented. “CUNA looks forward to working with federal regulators in promulgating rules to put this new law into effect.”

NAFCU Director of Legislative Affairs Brad Thaler stated, “We were particularly pleased to see five credit union-specific provisions included in the final legislation, including language backed by NAFCU to clarify, that, in the case of merging credit unions, the net worth of both merged institutions is counted for regulatory 'prompt corrective action' purposes.” S. 2856, the reg relief bill, passed the House on Sept. 27 under suspension of the rules by a unanimous vote of 417-0 and was approved by unanimous consent in the Senate on Sept. 30. Congressman Jeb Hensarling (R-Texas), who introduced the House bill last year, said, “Our financial institutions are in desperate need of regulatory relief. There are far too many redundant and costly regulations that make credit more expensive and less accessible. Thoughtful regulatory relief improves the vitality of our capital markets and helps more Americans realize their dreams of homeownership, higher education or owning their own small business.” Back to the Future

Credit union and bank lobbyists are already beginning to strategize on how they will launch their next regulatory relief offensive on Congress, but a lot hangs in the balance of which party is in control next year. “We will continue our efforts in the next Congress to press for additional relief provisions contained in the Credit Union Regulatory Improvements Act such as the risk-based capital proposal advanced by NCUA,” Thaler said.

CUNA Senior Vice President of Legislative Affairs John Magill agreed, “The end of the week went out with a bang as reg relief was signed into law. It wasn't everything obviously we had hoped for but it's a good strong bill and we will revisit this issue in the months to come.”

Upon the signing of the reg relief bill, Spencer Bachus (R-Ala.), a likely Republican contender for the Financial Services Committee chairmanship after Mike Oxley's (R-Ohio) retirement, said, “This legislation will allow banks, thrifts, and credit unions to devote more resources to the business of lending to consumers and less to navigating the bureaucratic maze of outdated and unneeded regulations.”

He has also said he would be interested in looking at additional regulatory relief matters again next year if he were to become chairman.

No matter how the next Congress shakes out, politicos are pretty convinced at this point that the majority will be held by a razor-thin margin. “When you have really close margins, it's very difficult to get anything passed…I don't see a lot happening in the next couple years on any legislative front except for the absolute, must-pass legislative bills, and you see where we are even today with the must-pass appropriations bills,” Magill said.

“More than anything else this is going to set up 2008,” CUNA Senior Vice President of Political Affairs Richard Gose commented. “The day after the election, everything postures to 2008. It's all political at that point. This may be one of the most politically charged sessions we've ever seen.”

Banker attempts to harm credit unions will not be helping matters either. Sagar said, “There's always that chance [of banks and credit unions working together]. I think that…hopefully this last go around will show them that they cannot pursue their own one-sided agenda and they would have to come to us to talk.” CUNA threatened to kill the reg relief bill a couple months back when a provision was added to expand the thrift business lending cap and not credit unions'.

However, he noted, “If anything, they're talking about introducing anti-credit union legislation in January.” Sagar said he had seen some reports quoting incoming American Bankers Association Chairman Earl McVicker expressing interest in legislation to force credit unions to convert to mutual savings banks if, for example, it wants to lend across state lines, do more business lending, or get into correspondent lending. –[email protected]