WASHINGTON—Both NAFCU and CUNA will be closely flowing proceedings at today’s House Financial Services Committee hearing titled “Making a Financial Choice: More Capital or More Government Control?”
The hearing is scheduled for 10 a.m. ET and will focus on committee Chair Rep. Jeb Hensarling’s (R-TX) proposed alternative bill to the Dodd-Frank Act. CUNA President and CEO Jim Nussle will testify at the hearing, marking the first time that Nussle, a former congressman from Iowa, will testify on Capitol Hill as president/CEO of CUNA.
Saying the Financial Choice Act is “not the perfect bill,” CUNA Chief Advocacy Officer Ryan Donovan said it is a “good place to start in terms of providing credit unions with relief from increasing regulatory burden so they can more fully serve their members.”
Donovan noted that the Financial Choice Act contains 11-12 major sections, or titles, and that today’s hearing focuses the first title, which would provide an exemption for certain safety and soundness regulations for credit unions and banks with a leverage ratio of more than 10%.
“To provide perspective, nearly 4,000 of the 6,000 U.S. credit unions operate with more than 10% net worth,” said Donovan. “So there is a potential to provide regulatory relief to a significant portion of the credit union system. This legislation would essentially exempt these credit unions from NCUA’s risk based capital rule, the interest rate risk regulation, the liquidity rules, among other things.”
Donovan yesterday said CUNA planned to file its testimony by the end of the day Monday. He said he expected the testimony to address how and why credit unions weathered the finical crisis well, the impact of regulatory burden on credit unions, and the effect that the provisions in Title I of the proposal would have on CUs.
“We will also discuss some suggestions for improvements in the bill and also why we are engaging in this process in the first place,” said Donovan. “We will be describing Title I as appropriate for credit unions given their history of being well capitalized and operating in safe and sound manner.”
NAFCU pointed out that Hensarling’s proposal also contains several provisions NAFCU is backing, including repeal of the Durbin amendment.
Other provisions in the bill include:
- Reforming the Consumer Financial Protection Bureau’s leadership to a five-person commission, and placing the bureau under the appropriations process.
- Limiting the Department of Justice’s Operation Choke Point, which would prevent the federal government from limiting or terminating financial institutions’ relationships with certain customers unless certain criteria are met.
- Reforming federal examinations of financial institutions to create an independent ombudsman and an independent examination appeals process.
- Extending regulatory relief to mortgage lending, including changes to data reporting under the Home Mortgage Disclosure Act.
This week’s sessions in both the House and Senate are the last before both sides of Capitol Hill take a seven-week recess, returning Sept. 6. Donovan said the lengthy recess, the longest he has seen in his 20 years in Washington, not only includes the traditional August recess, but also time away to accommodate the Democratic and Republican National Conventions this month.
Before Congress adjourns this week, they also plan to address:
- On Tuesday, the HFSC’s Financial Institutions and Consumer Credit Subcommittee will examine the opportunities and challenges within the financial technology sector, or fintech, and the development of online marketplace lenders.
- The House Energy and Commerce Subcommittee on Communications and Technology on Tuesday will look at the oversight of the FCC.
- On Tuesday, the Senate Commerce, Science and Transportation Committee will review how the Federal Communications Commission’s proposed privacy regulations affect consumers and competition.
- On Wednesday, Housing and Urban Development Secretary Julian Castro will testify before the HFSC in a hearing on HUD’s accountability.
- The House Budget Committee on Wednesday will discuss how to restore the trust of Americans near retirement.
- The Oversight and Investigations Subcommittee on Thursday will discuss the Financial Stability Oversight Council and the designation of non-bank financial companies.
NAFCU this week will also broadcast two webcasts: a review of risk assessment relating to the Bank Secrecy Act on Tuesday and how to perform data analytics on Wednesday.