WASHINGTON—The Senate Banking Committee has passed S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, which has not just bipartisan support in the Senate but also bipartisan support from credit union and bank trade groups.
A credit union-specific provision in S 2155 would grant credit unions parity with banks when making loans for the purchase of one-to-four unit, non-owner occupied residential property loans.
Such loans are designated real estate loans for banks, but business loans for credit unions, meaning they count against the statutory member business lending cap for credit unions. A change in the treatment of those loans has been a long-time priority for credit unions.
S 2155 would classify such credit union 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.
“Advancing this bill through committee is a strong first step, but credit unions must remain engaged and keep up the momentum to get this bill to the finish line,” said CUNA President/CEO Jim Nussle. “We saw at the markup that the regulatory relief measures in this bill have strong bipartisan support, and CUNA will continue its advocacy push to help move this bill forward."
Other provisions in the bill that have credit union support include changes that would:
- Treat loans held in portfolio by certain lenders as Qualified Mortgages
- Raise Home Mortgage Disclosure Act reporting thresholds to 500 closed-end and open-end loans in calendar year
- Apply the same consumer protections in place for mortgage lending to Property Assessed Clean Energy (PACE) loans
- Remove 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 a credit union’s lower annual percentage rate to the consumer
- Provide legal immunity for properly trained, good-faith reporters of suspected financial elder abuse
- Require the Treasury to conduct a study on the risks that cyberthreats might pose to financial institutions
The legislation was led by Senate Banking Chairman Mike Crapo (R-ID), as well as Democrats on the committee that include Joe Donnelly (IN.), Heidi Heitkamp (ND), Jon Tester (MT) and Mark Warner (VA.)
“This bill is a good first step in the right direction, common-sense regulatory reform for small and mid-size community banks and credit unions,” said Sen. Jon Tester (D-MT). “Community banks and credit unions, it's been said repeatedly, did not cause the crisis, and a one-size-fits all rule package is not what we need.”
The bill now goes on to the full Senate for its consideration.