WASHINGTON–CUNA has sent a letter to the House Financial Services Committee regarding the reintroduction of the Financial CHOICE Act in the new Congress that reiterates many of the points it made in pushing for the legislation in the previous Congress, but which also requests some modifications.
With Republicans controlling the House, the bill’s prospects are expected to be stronger this year.
“(The) one-size-fits-all regulation does not work for Main Street – local credit unions, small banks, and the consumers and small businesses they serve,” wrote CUNA CEO Jim Nussle in the letter. “It’s created a rigged system favoring the largest institutions who can afford to comply with the "solutions" dreamt up in Washington – the very institutions that caused the crisis that hurt so many. Now, over regulation of small institutions is hurting consumers, costing them time and money, and limiting their choices. Local member-owned credit unions know their members better than Washington which is why now is the time for Congress to enact regulatory reform that works for credit union members.”
The letter, addressed to Committee Chairman Jeb Hensarling (R-TX) asks for some modifications to the current wording, saying “certain provisions make it difficult for us to fully endorse the bill.”
Among the concerns raised and remedies proposed by CUNA:
Savings and Loans Treated as National Banks
“The CHOICE Act includes a provision that would allow savings and loan associations (S&Ls) to elect to operate as national banks, thereby circumventing a statutory cap on business lending,” CUNA wrote. “We oppose this provision in the absence of similar legislation providing statutory relief for credit unions from the member business lending cap. No one has articulated a sound public policy reason that the S&L cap ought to be essentially eliminated but the credit union cap ought to stay intact.”
Saying it recognizes Congress may not be willing to lift the cap on member business loans, CUNA proposed instead addressing the disparity in the treatment of certain residential loans, such as one-four unit non-owner occupied residential dwelling, and not having those count toward the cap.
National Credit Union Administration Subject to Appropriations
CUNA said it has “grave concerns regarding the provision that would subject the National Credit Union Administration (NCUA) to the appropriations process. Credit unions and their members currently fund NCUA. If for any reason NCUA requires additional funding, so long as the need is demonstrated transparently, credit unions – not taxpayers – are called on to provide the additional funds. Similarly, if NCUA’s funding requirements diminish, credit unions should be required to pay less. This equitable funding is best preserved by maintaining current direct funding mechanisms…”
Funding for the FFIEC Ombudsman
CUNA wrote that its analysis of the funding scheme for the creation of an Ombudsman at the Federal Financial Institutions Examination Council suggests it could create a disproportional burden on credit unions and their members. “The funding for such a position should be based on either expected or actual use or an asset base, which will help ensure that funding is equitably assessed among the regulated industries,” CUNA said.
Review of Executive Regulations
CUNA said it also has concerns over the provision that would repeal the Chevron deference doctrine of administrative law that gives federal agencies deference on their interpretations of statutes. “We believe the implications of this provision, particularly its applicability only to financial regulators, ought to be given further consideration before changes are enacted,” CUNA said.
The CUNA letter also addresses the CFPB and FSOC and OIRA reforms. A full copy can be found in CUToday.info’s The gov here.