WASHINGTON—With the new Republican-controlled Congress expected to chip away at Dodd-Frank, efforts to make changes to the 2,300-page piece of legislation are not unwelcomed by credit unions, say CUNA and NAFCU.
The credit union trade associations say that any changes to Dodd-Frank that can reduce the regulatory burden on CUs are good, and that it may be time for the regulatory pendulum to swing back slightly. Both trade groups believe any efforts to trim back Dodd-Frank are not a signal the country is forgetting its past.
Ryan Donovan, SVP-legislative affairs at CUNA, does not see Republican efforts, such as the bill recently introduced in the House by Rep. Michael Fitzpatrick (R-PA) to make technical corrections to Dodd-Frank, as necessarily attempts to gut Dodd-Frank, but instead more of a natural course of Congress in addressing an act that has now been around for several years.
“Will there be Republican efforts to ‘gut’ Dodd-Frank? That is in the eye of the beholder,” said Donovan. “Certainly there will be efforts to make changes to Dodd-Frank, and some of those changes will be viewed by the strongest supporters of the Dodd-Frank legislation as ‘gutting.’ However, I would suggest these efforts should be viewed as improving the legislation.”
Ryan Donovan, CUNA
Two Bill Types
Donovan expects to see two types of bills introduced in this new Congress addressing Dodd-Frank.
“There will be some very broad in scope, dealing with the structure, oversight and funding of the CFPB,” explained Donovan. “And then there will be others focused on particular issues or rulemaking, or changes in the law that are designed to help financial institutions better deliver their services. I think the administration has well established its position on the former, and I am hoping they will look at the latter in a different light.”
Donovan expects to see legislation proposed to replace the CFPB director with a board, and efforts to change the way the CFPB is funded, moving it to the appropriations process. “My initial read is there will be efforts by Republicans to take legislation through—but if they take legislation through the chamber, I think they will meet a frosty reception by the administration.”
Donovan expects the bills targeting Dodd-Frank this year will ensure that the regulations the CFPB are issuing, and the laws the bureau is relying on to implement its regulations, are written in a manner that achieve the outcomes intended by Congress.
“I think legislation like that, in the long run, stands a better chance of passing,” said Donovan.
Donovan added that CUNA is focused on how the CFPB’s rules are impacting credit unions’ ability to deliver high-quality, cost-effective and efficient services to their members. “And to the extent that there are barriers to that we want to work to try to remove them.”
Brad Thaler, NAFCU
Bipartisan Support
NAFCU’s VP of legislative affairs Brad Thaler concurred, saying that any legislation that would reduce regulatory burden will be supported, reminding there has been bipartisan support for changes to Dodd-Frank.
“Since passage of Dodd-Frank five years ago there have been various type of proposals put together,” said Thaler. “Most of them have gotten bipartisan support. A lot of the bills deal with the market side of banking, the SEC and derivatives. What the Fitzpatrick bill does—in broad terms—is compile a series of some of the proposals that have been out there into one piece of legislation.”
Thaler noted that in addition to Congress now being controlled by Republicans, a significant number of House and Senate seat holders today, among both parties, were not among those who passed Dodd-Frank in 2010.
“I think you will see, as with any major regulation out there for years, there will be ideas to reform aspects of it and make tweaks to it,” said Thaler.
Thaler, like Donovan, sees attempts to change CFPB oversight form a single director to a board, and that the funding of the bureau will be addressed.
“Even the CFPB has come back and looked at some of their steps, as well,” noted Thaler. “We think that ultimately there will be change related to the CFPB and issues surrounding it. To what degree will be determined.”