The proposal for this provision came from NCUA and based upon the ongoing Basel II discussions. The NCUA Board also officially issued the proposed capital plan at a board meeting this summer.

The bill also includes an important provision to increase credit union member business lending authority from 12.25% of assets to 20%, as well as excluding loans up to $100,000 from the cap compared to $50,000 under current law. Additionally, loans to non-profit religious organizations would be excluded. This part had been in earlier versions of the bill as well.

Entirely new to CURIA this year, following the American Bankers Association's legal victory over NCUA regarding field of membership, is a section that would allow all federal credit union charter types to adopt underserved areas. After the legal battle, only multiple common bond credit unions were permitted to adopt underserved areas.

In an attempt to avoid banker challenges, the provision incorporates two definitions for underserved areas already in law: the Community Development Financial Institutions Fund's 'investment area' definition or the 'low income community' definition under the New Market Tax Credit program. Credit unions could apply either definition, Thaler explained.

A particularly controversial provision of the bill would require credit unions looking to convert to mutual savings banks to obtain 30% voter participation, at the same time precluding voter incentives, such as raffles and door prizes. Previous versions of CURIA had included a 20% voter minimum; currently there is no minimum as the law was amended in H.R. 1151. Prior to H.R. 1151, there was a 50% voter minimum participation.

The bill also includes some regulatory enhancement items such as expanding investment opportunities and providing NCUA greater authority and flexibility in dealing with natural and man-made disasters.

All of the modifications the law proposes have met with strong resistance from the banking lobby. Even with the modifications to the risk-based capital framework, former America's Community Bankers President/CEO Diane Casey-Landry said, "There's no redeeming value to CURIA…There is no way we're going to say there is one iota of a reason for CURIA to exist."

American Bankers Association President/CEO Edward Yingling vowed to "vigorously" oppose the legislation again, specifically pointing to the business lending provisions.

Independent Community Bankers of America Chairman James P. Ghiglieri, Jr., president of Alpha Community Bank, Toluca, Ill., said earlier this year, "This legislation is not regulatory relief, rather it vastly expands credit unions' powers to do more commercial lending and would weaken credit unions' capital requirements."

By contrast, NASCUS has supported the risk-based capital requirements and pushed for further capital modernization. NASCUS President/CEO Mary Martha Fortney said her organization would also like to see all credit unions have the authority to accept alternative capital.

On the conversion requirements, however, NASCUS advocated that deference be given to the chartering body to regulate rather than including it in CURIA.

Trade associations CUNA and NAFCU have stood steadfastly, 100% behind the bill. "We have nearly 140 co-sponsors, nearly one-third of the House," CUNA Senior Vice President of Legislative Affairs John Magill noted. He explained, "We think support in the House send a message to other, particularly in the Senate." At the point CURIA has not been put forward in the Senate, but a handful of key Senate Banking Committee members are studying a financial services-wide regulatory relief bill. Credit union groups have weighed in.

A CURIA hearing is likely for 2008, according to NAFCU's Thaler, though one had been promised for this session of Congress. "We also are pleased that Chairman Frank has agreed to hold a hearing on this legislation in 2008. We remain optimistic that the House will tackle the issues raised by CURIA in the year ahead," he said.

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