WASHINGTON–Negotiations in the Senate Banking Committee aimed at easing financial regulations, especially on smaller institutions such as credit unions, have broken down.
Idaho Republican Mike Crapo, who chairs the committee, and Sen. Sherrod Brown (D-OH) confirmed that bipartisan discussions aimed at revising the Dodd-Frank Act Ohio and which have been in the works for months have come to a halt.
“This is disappointing but not surprising,” said CUNA’s chief advocacy officer, Ryan Donovan. “And, we hope it is not a permanent. Bringing about common sense regulation is a process. We hope both sides will continue to work together to put forth bipartisan legislation that focuses on many of the important issues that impact consumers and small financial institutions including credit unions.”
Much of the discussion had been around how to provide relief for small community banks and credit unions from financial regulations put in place after the financial crisis in response to the behavior of large Wall Street banks.
"After working in good faith, it’s clear we will not be able to reach a compromise," Brown said in a released statement.
Analysts have suggested that getting any kind of relief legislation for small banks and credit unions through the current Congress is now unlikely, given other issues on the congressional calendar.
Separately, President Trump signed a joint resolution that nullifies the Consumer Financial Protection Bureau’s (CFPB) arbitration rule. Both credit union trade groups supported the repeal. NAFCU was on hand at the White House for the signing.
Released in final form in July, the CFPB's arbitration rule would have prohibited the use of arbitration agreements for the purpose of limiting access to class action litigation.
“The repeal of the CFPB’s arbitration rule is a win for credit unions, as well as a positive sign that Congress is willing to intervene when it comes to ill-tailored rules not narrowly focused on abusers of consumers,” said CUNA President/CEO Jim Nussle in a statement. “CUNA, leagues and credit unions will build on this momentum that one-size-fits-all rulemaking from the CFPB does not make sense for smaller financial institutions like credit unions moving forward as we work to achieve additional regulatory relief objectives.”
NAFCU President and CEO Dan Berger and EVP Carrie Hunt were at the White House for the signing.
"NAFCU strongly supports consumer protections, but credit unions were not the bad actors this rule was meant to target," Berger said. "We appreciate President Trump and Congress for their leadership and listening to our concerns and working to ensure consumers and institutions have access to various forms of dispute resolution. NAFCU is honored to have been invited to the White House to watch the undoing of a rule that likely would have had negative effects on the credit union industry."
The Consumer Federation of America (CFA), which frequently sides with CUs on numerous issues, blasted the repeal of the rule.
“Today, President Trump stood shoulder to shoulder with big banks and turned his back on all of us,” the CFA said in a statement. “With a stroke of a pen, the President stripped away the choice, from millions of consumers, to decide on their own how they’ll hold companies accountable when they have been wronged. The result will be unchecked wrongdoing, with bad actors pickpocketing everyday consumers without accountability.
“When consumers can join together they put powerful interests on notice that they will be held accountable for their actions,” the CFA continued. “When consumers are forced to stand alone, the powerful are able to do them wrong without accountability.”