A bipartisan group of senators, led by Banking Chairman Mike Crapo (R-Id.) Monday unveiled changes to Dodd-Frank that eschews a controversial overhaul of the CFPB in favor of other that credit union trade groups said would provide them with much-needed regulatory relief.

The groups emphasized the importance of several provisions, including one that would provide that a 1- to 4-family dwelling that is not the primary residence of a member not be considered a member business loan under the Federal Credit Union Act.

“We certainly think there are good things in the bill that will help credit unions,” said Carrie Hunt, NAFCU’s executive vice president of government affairs and general counsel. She added that taken together, changes in mortgage law particularly will help credit unions.

“We’re real pleased with the efforts of Sen. Crapo and Democrats on the Banking Committee," said Ryan Donovan, CUNA’s Chief Advocacy Officer.

The group announced that nine Republicans, eight Democrats and one independent have signed on as original sponsors of the legislation.

Another section of the bill “provides that certain mortgage loans that are originated and retained in portfolio by an insured depository institution or an insured credit union with less than $10 billion in total consolidated assets will be deemed qualified mortgages under the Truth in Lending Act (TILA) while maintaining consumer protections,” according to a summary of provisions released by the senators.

Notably, the bill would increase the so-called “too big to fail” threshold from $50 billion in assets to $250 billion in assets. Those institutions are the ones targeted for the toughest regulatory scrutiny.

Senators emphasized the bipartisan nature of the legislation.

“The bipartisan proposals on which we have agreed will significantly improve our financial regulatory framework and foster economic growth by right-sizing regulation, particularly for smaller financial institutions and community banks,” Crapo said, as the senators released details of the legislation.

“This bipartisan regulatory relief package is an example of what we can achieve when we work together,” said Sen. Joe Donnelly of Indiana, one of a group of moderate Democrats who cut the deal with Crapo.

That group does not include Senate Banking ranking Democrat Sherrod Brown of Ohio, who immediately said he would oppose the legislation.

“The past 30 years, the number of community banks and credit unions have dropped by about two-thirds, yet more than 80 percent of North Dakota deposits still go to community banks, reinforcing that small financial institutions remain a key resource for North Dakota families,” said Sen. Heidi Heitkamp (R-N.D.).

The bill does not make large changes to the CFPB—a frequent target for congressional Republicans and credit unions.

The House has passed Financial Services Chairman Jeb Hensarling’s (R-Texas) Financial CHOICE Act, which would greatly diminish the CFPB’s powers. The Trump Administration also has pushed for large changes to the agency.

However, any changes to Dodd-Frank will need 60 votes in the Senate to pass to avoid a possible filibuster.

And exactly how difficult it would be to get 60 votes to pass CFPB changes became abundantly clear recently when Republicans needed Vice President Pence to cast the 51^st vote to nullify the agency’s arbitration rule.

“This is a narrower approach than what was in the House bill,” Hunt said. “We’ve long expected that the Senate would take a narrower approach.”

Donovan said he had expected the Senate legislation to forego large changes to the CFPB for that very reason.

“It’s not hard to do the math,” he said.

He added that CUNA wanted to ensure that some regulatory changes would be able to be enacted.

“Let’s get what we can get done today and we’ll worry about the other things in the future,” he said.

Crapo had been working much of the year with Brown, the ranking Democrat on the Banking Committee.

However, Brown recently said that he was not able to come to an agreement with Crapo. And Brown said the bill unveiled Monday goes too far.

“I understand my colleagues’ interest in agreeing to this legislation, but disagree on the wisdom of rolling back so many of Dodd-Frank’s protections with almost no gains for working families,” Brown said. “Banks made record profits last year and it looks like executives will get bigger bonuses this year. Hourly wages have stagnated for 40 years, and too many Americans are still feeling the impact of the 2008 financial crisis. Who needs help the most?”

The Republican cosponsors of the bill are Crapo, Bob Corker of Tennessee, Tim Scott of South Carolina, Tom Cotton of Arkansas, Mike Rounds of South Dakota, David Perdue of Georgia, Thom Tillis of North Carolina, John Kennedy of Louisiana and Jerry Moran of Kansas.

The Democratic cosponsors are Donnelly, Heitkamp, Jon Tester of Montana, Mark Warner of Virginia, Tim Kaine of Virginia, Joe Manchin of West Virginia, Claire McCaskill of Missouri and Gary Peters of Michigan.

The Independent cosponsor is Sen. Angus King of Maine.

Instant Insights /

Crapo, Moderate Democrats Announce Deal on Dodd-Frank Changes

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