As the House prepared to pass a Republican plan to overhaul Dodd-Frank, Senate Banking Chairman Mike Crapo (R-Id.)said Thursday that his committee won't produce its bill for atleast several months.

And the goal, Crapo said, is to produce a bipartisan packagethat can garner Democratic support.

During the past several months, Crapo and ranking DemocratSherrod Brown (D-Ohio) have solicited proposals to foster economicgrowth. At the same time, Crapo said federal banking agencies havesubmitted a report on regulatory paperwork reduction and theTreasury Department is working on a set of recommendations on howto overhaul the financial regulatory regime.

“Together, these steps demonstrate a commitment to reviewing ourfinancial regulatory framework to determine what is working andwhat is not working,” he said.

Interestingly, Crapo did not mention the House proposal, whichwent to the House floor on Thursday and is a Republican proposalthat has received widespread condemnation from Democrats.

As the Banking Committee opened a hearing on community financialinstitutions, Brown said he is concerned that the regulatory debatewill be centered on changes that have little to do with economicproblems facing many Americans.

“So, as we discuss the role of financial institutions in localcommunities, I look forward to hearing new ideas to promoteeconomic growth,” he said. “I'm less interested in hearing oldcomplaints about issues that have little or nothing to do withsolving the economic issues plaguing our communities. The evidencefrom the financial crisis shows that deregulation does not lead tosustainable economic growth, but a breakdown in consumerprotections that can lead to a financial crisis.”

Thursday's hearing featured three credit union officials, twocommunity bankers and a law professor from GeorgetownUniversity.

The credit union officials and community bankers said Congressmust overhaul Dodd-Frank to encourage economic growth.

“The time to act is now,” said Steve Grooms, president/CEO of1st Liberty Federal Credit Union, a credit union in Great Falls,Mont., with about $176 million in assets. Grooms represented NAFCUin the hearing.

A CUNA witness said financial regulations currently favor largefinancial institutions.

“In truth, the current regulatory scheme only serves to benefitthe largest banks and predatory lenders that have the resources togame the system,” Dallas Bergl, CEO of INOVA Federal Credit Unionlocated in Elkhart, Ind., said. “This should not be the way theworld works.” Bergl's credit union has more than $336 million inassets.

The witnesses were given three minutes to present theirtestimony, but they expanded their testimony in written statementssubmitted to the committee.

Grooms said that because of increased costs and tighter margins,his credit union has had to shut down three branches. Grooms saidNAFCU continues to believe credit unions should be exempt fromCFPB rulemaking. That authority would be returned to the NCUA,Grooms said.

“[The] NCUA should be the sole regulator for credit unions andwork with other regulators on joint rulemaking when appropriate,”Grooms said.

He said the NCUA should have the authority to delayimplementation of a CFPB rule if compliance would create an unduehardship. He added the NCUA should have the authority to modify aCFPB rule for credit unions as long as the objectives of the rulecontinue to be met.

Bergl said his credit union has had to face new regulatoryhurdles even though it has attempted to put its members first.

The CFPB has resisted its exemption authority to fully exemptcredit unions from any of its rulemakings, he said. That has had adetrimental impact on credit unions, Bergl said.

“The CFPB's unwillingness to adequately exercise its exemptionauthority has resulted in credit unions reducing the availabilityof, or eliminating entirely, safe and affordable financial productsfrom the market,” he said.

Bergl said Congress should enact legislation that exempts creditunions and small banks from all bureau rulemaking unless it can bedemonstrated that it is needed. And he added the NCUA should notsimply mimic other banking regulators that are designed for largebanks.

However, John Bissel, president /CEO of Greylock Federal CreditUnion in Pittsfield, Ma., said Congress should not return to theregulatory regime that existed before the 2008 economic crisis.

“While I want smarter regulation as much as anybody, I ask thatyou please, do not allow a repeat of the excesses and predatorypractices that precipitated the crisis in the first place,” hesaid.

Bissel, whose credit union has more than $1 billion in assets,said, “As the only CDFI credit union in the region, and with ourstrong $1 billion balance sheet, we at Greylock recognize ourresponsibility to redeploy deposits back into our local economy,help create jobs, boost consumer purchasing power and expand wealthbuilding opportunities.”

Adam Levitin, a law professor at Georgetown University, saidproposals made by the financial industry “have little to do withgrowth and have nothing to do with improving the economic conditionof American families.”

He said he opposes one of the hallmarks of the credit uniondrive for deregulation.

“There is no reason to exempt credit unions as a class from allCFPB rulemakings,” he said. “Such a [blanket] approach isoverbroad. While most credit unions are 'good actors,' not all areall the time, unfortunately.”