WASHINGTON–After years of efforts by credit unions and their trade groups, the House has voted 258-149 to pass S. 2155, the reg relief bill formally known as the Economic Growth, Regulatory Relief and Consumer Protection Act.
The legislation, passed by the Senate in March, will now go to President Trump for his signature in the near future. The bill was originally introduced by Senate Banking Committee Chairman Mike Crapo (R-ID) and several Democratic members of the Committee in November 2017.
S. 2155 was the rare piece of legislation that has the backing of both credit unions and banks, although it has been opposed by a number of consumer groups that argue it rolls back consumer protections put in place by the Dodd-Frank Act.
Reg Relief Provisions for Credit Unions
According to CUNA’s analysis, regulatory relief provisions in the bill that will benefit credit unions include:
- Classification of credit union one-to-four unit, non-owner occupied residential property loans as real estate loans, freeing up credit unions to lend to more small businesses, which CUNA said it believes would make up to $4 billion in additional capital available
- Treatment of loans held in portfolio by certain lenders as Qualified Mortgages
- A raising of Home Mortgage Disclosure Act reporting thresholds to 500 closed-end and open-end loans in calendar year
- Application of the same consumer protections in place for mortgage lending to Property Assessed Clean Energy (PACE) loans
- Removal of the three-day wait period required under the Truth in Lending Act Real Estate Settlement Procedures Act integrated disclosure rule’s mortgage disclosure if a creditor extends a second offer of credit union's lower annual percentage rate to the consumer
- Provisions for the legal immunity for properly trained, good-faith reporters of suspected financial elder abuse
- A requirement that the Treasury conduct a study on the risks that cyberthreats might pose to financial institutions
'A Major Round of Applause'
“CUNA, state credit union leagues, credit unions and credit union members all deserve a major round of applause for getting this historic bill through Congress and onto the president’s desk,” said CUNA President/CEO Jim Nussle in a statement. “From the moment a group of bipartisan Senators unveiled this bill, credit unions told them loud and clear that this is an essential piece of regulatory relief legislation that will improve access to mortgage lending, real estate loans and other products and services, while putting focus on senior abuse and cyberthreats.
"We thank the group of bipartisan Senators, their colleagues who voted in favor of the bill, House leadership, and all the members of the House who supported S. 2155,” Nussle continued. “The bill’s opponents fought hard, but the credit union movement continued their strong engagement leading into a tough election year.”
As CUToday.info has reported, in the lead-up to the legislation, state CU associations in at least 16 states joined with their state banking organizations to call on their members of Congress to support the bill.
'A Great Step Forward, But...'
NAFCU CEO Dan Berger also had praise for the bill's passage.
"The passage of this bill is not just months in the making, but years, as our industry has been fighting regulatory burden since the implementation of the Dodd-Frank Act," said Berger. "NAFCU and its members are incredibly appreciative that Congress recognized it was time to tackle one of the greatest challenges facing the credit union industry – unnecessary, burdensome regulations. We thank Chairman Crapo, the Democratic and Republican cosponsors of this bill, and members of the Senate for crafting bipartisan legislation, and we thank [House Financial Services Committee] Chairman [Jeb] Hensarling and representatives on both sides of the aisle who voted in favor of it.
"The regulatory relief contained in this bill is a great step forward, but there remain a series of initiatives beneficial to our nation's Main Street and small financial institutions that NAFCU will continue to pursue," added Berger. "We look forward to continuing our advocacy efforts with Congress, as the House and Senate have indicated a willingness to tackle more regulatory relief provisions for credit unions."
Following the bill's passage, Berger immediately sent a letter thanking President Donald Trump for his leadership on helping Main Street financial institutions, and urging him to sign the bill, NAFCU reported.
Bankers Hail Passage
The Independent Community Bankers of America (ICBA) also hailed the bill’s passage.
“This hard-fought, long-awaited community bank regulatory relief legislation will put community banks in an enhanced position to foster local economic growth and prosperity. By unraveling some of the suffocating regulatory burdens community banks face, they are better able to unleash their full economic potential to the benefit of their customers and communities,” ICBA President and CEO Rebeca Romero Rainey said in a statement. “ICBA thanks Congress for passing this crucial bipartisan bill, along with the thousands of community bankers, affiliated state associations and other industry allies who have fought for years for substantial regulatory relief that will strengthen economic growth, job creation, and consumer protection in local communities.”
Reg Relief Provisions for Banks
In addition to the provisions listed above, the ICBA said regulatory relief for community banks includes provisions to:
- Exempt certain community bank loans from escrow requirements
- Simplify community bank capital requirements
- Create a short-form call report for use in the first and third quarters by certain well-rated community banks
- Expand eligibility for the 18-month regulatory exam cycle to more community banks
- Ease appraisal requirements to facilitate mortgage credit in local, rural communities
- Exempt most community banks from the Volcker Rule
- Expand access to the Federal Reserve’s Small Bank Holding Company Policy Statement to help more community banks build capital
- Allow federal savings associations with $20 billion or less in assets to operate with national bank powers
- Improve regulatory treatment of reciprocal deposits and certain municipal securities
- Provide relief for larger community banks, including higher asset thresholds for systemically important financial institution designations, and easing of stress testing and formal risk committee requirements