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WASHINGTON — House Financial Services Committee Chairman Barney Frank (D-Mass.) said last week he opposes giving credit unions additional carve outs on the key pieces of the regulatory restructuring proposal, but industry lobbyists said they hope for a better result in the Senate.Frank said that while CUNA and NAFCU make a “plausible argument,” that some additional credit unions-beyond those with assets of less than $1.5 billion as the legislation currently states-should be exempt from being examined by the Consumer Financial Protection Agency, he doesn’t see that provision changing before the bill reaches the House floor in early December.Frank, who made his comments at a news conference in response to questions from Credit Union Times, said they may add language allowing the CFPA and the bank and credit union regulators to swap institutions that they examine on consumer issues.As the bill is written, all financial institutions must comply with the rules issued by the new agency, but credit unions with assets under $1.5 billion would be examined by the NCUA on consumer issues. Banks with assets of under $10 billion would be examined on consumer issues by their bank regulator.CUNA Vice President of Legislative Affairs Ryan Donovan said that his organization’s “concerns are still being heard, and we are trying to work together to get a solution that works for both the chairman and us.”He said even if the House passes a bill that isn’t to CUNA’s liking, there are additional chances in the Senate and when the House and Senate versions are eventually reconciled.Although Senate Banking Committee Chairman Christopher Dodd (D-Conn.) has the votes to pass a bill out of his committee and the Democrats have a 20-seat majority in that chamber, the rules there give opponents more opportunities to delay or kill legislation.Also, the results of last week’s elections, in which voters expressed skepticism about some of the Obama administration’s efforts to expand the reach of government, could impact how the debate plays out.“I’m not sure the election results will have a great effect on the men who are wielding the gavel, but it may affect their ability to round up the troops for a vote,” said CUNA Senior Vice President for Legislative Affairs John Magill.Frank also said he opposed expanding the exemption for funding the Systemic Resolution Fund beyond those credit unions with assets of $10 billion or less.“A financial crisis rains on everybody, and if you are a big institution, you are interested in systemic stability,” he said. “The bill will exempt all but a handful of credit unions.”Under the proposed legislation, financial institutions with assets of more than $10 billion would be charged a risk-based assessment to finance the Systemic Resolution Fund, which is aimed at rescuing large financial institutions that federal officials determine could impact the entire financial system if they were allowed to collapse.At press time, his committee was still discussing the systemic risk legislation.Three credit unions have more than $10 billion in assets: Navy Federal CU, Pentagon Federal CU and State Employees CU.NAFCU President CEO Fred Becker, whose association represents Navy Federal and Pentagon Federal, said NAFCU will emphasize the unfairness of having credit unions pay for the mistakes of other kinds of financial institutions.“We don’t see why credit unions should bail out the future AIGs. They are already responsible within the credit union system,” he said. “It’s the troops and state employees who are being asked to pay for the fund, and that’s not fair.”Frank’s panel approved the CFPA legislation last month and began discussing the systemic risk legislation last week. It had not been completed as of press time. He said they hoped to have all the bills on regulatory restructuring considered on the House floor during the first week of December.The Senate is likely to deal with the regulatory restructuring in one large bill. Dodd is scheduled to release a draft of the bill this week and has said it will include one large regulator for banks, although his staff members have indicated that the NCUA would remain separate.Although he and the committee’s top Republican-Sen. Richard Shelby of Alabama-have been meeting on the subject for several weeks, they have not reached an agreement. Shelby is a strong opponent of the CFPA.“It’s all up the air in the Senate,” Becker said. “The process there is somewhat muddled.”–[email protected]

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