House committee votes 67-0 for reg relief
WASHINGTON (11/17/05)¡XSticking pretty close to the script that was written last year, the House Financial Services Committee Wednesday approved a broad bill designed to provide regulatory relief to credit unions, banks and thrifts, which is virtually identical to legislation overwhelmingly approved by the full House in 2004.
The committee voted 67-0 to approve The Financial Services Regulatory Relief Act of 2005 (H.R. 3505) introduced in July by Reps. Jeb Hensarling (R-Tex.) and Dennis Moore (D-Kan.).
President/CEO Daniel A. Mica of the Credit Union National Association (CUNA) called the committee’s unanimous vote a significant victory for credit unions because the bill contains at least 13 provisions for credit unions in spite of bankers’ attempts to block them.
The credit union provisions include a new net worth rule that would allow credit unions to continue pooling their capital after mergers. The bill excludes a proposal by the National Credit Union Administration (NCUA) for risk-based capital.
“The drafters of the bill and the committee leadership have been determined to keep the bill similar to the one introduced last year by Rep. Shelley Moore Capito (R-W.Va.) that won a sound endorsement from the full House,” said Gary Kohn, vice president of legislative affairs for CUNA.
“The intention is that, if the Senate follows suit and drafts an uncontroversial bill, credit unions and other financial services providers might have regulatory relief by the end of this Congress,” Kohn added. The Senate has not yet drafted a comparable bill.
The NCUA capital proposal is included in the Credit Union Regulatory Improvements Act (CURIA, H.R. 2317), as is a provision that would increase credit union member business lending limits to 20% up from 12.25%.
Mica said CUNA will continue to seek additional flexibility for credit unions, particularly through CURIA, but added that the broader bill approved by the House committee Wednesday includes important provisions credit unions have been seeking for the last four years.
“We commend Chairman Oxley and the members of the House Financial Services Committee for unanimously approving the Financial Services Regulatory Relief Act,” Mica said. “This represents a significant victory for credit unions - but we are not yet finished.”
The relief bill includes the following provisions for credit unions:
• Privately insured credit unions to become members of a Federal Home Loan Bank;
• Leases of land on federal facilities for credit unions;
• Investments in securities by federal credit unions;
• An increase in general 12-year limitation of term of federal credit union loans to 15 years;
• An increase in 1% investment limit in credit union service organizations;
• Member business loan exclusion for loans to non-profit religious organizations;
• Check cashing and money transfer services offered within the field of membership;
• Voluntary mergers involving multiple common bond credit unions;
• Conversions involving common bond credit unions;
• Credit union governance;
• Providing the NCUA with greater flexibility in responding to market conditions;
• An exemption from pre-merger notification requirement of the Clayton Act; and
• Treatment of credit unions as depository institutions under securities laws.