CUNA Legislative Overview 111th Congress By every measure, the 111th Congress has been one of the most active Congresses in over 40 years. The list of major legislation enacted over the last two years includes the Economic Stimulus bill, Student Lending Reform, the Cash for Clunkers, Credit Card Reform, Mortgage Reform, Financial Reform, Health Care Reform, Volunteer Promotion, Gender Discrimination Prevention, Small Business Lending, Hate Crimes Prevention, Iran Sanctions, Weapons System Acquisition Reform and Smoking Prevention and Tobacco Control legislation. A “do nothing” Congress this was not. Credit unions were right in the thick of it from beginning to end. In the First Session, Congress enacted the Credit Union Share Insurance Stabilization Act, which provided the flexibility for credit unions to spread out the premiums associated with the corporate credit union situation. When Congress considered credit card reform, credit unions were adversely affected due to an unintended consequence, which Congress fixed through a technical corrections bill. And, credit unions grassroots efforts were the reason that judicial mortgage modification legislation (cramdown) was defeated twice. When Congress turned its attention to repairing the regulatory framework that caused the greatest financial crisis since the Great Depression, CUNA and the Leagues were there to work with Congress to minimize the adverse impact on credit unions. We were able to persuade Congress and the administration to retain NCUA as the independent credit union regulator, and keep the NCUSIF separate from the FDIC. When the administration sought to create a new bureau focusing on consumer protection, we responsibly responded with a litany of changes credit unions sought, and we were successful in getting just about all of them. Even though credit unions did not cause the problem and have not been subject to the widespread consumer complaints that other providers have, we approached regulatory restructuring from the perspective that Congress was going to enact something and we might as well be at the table to make sure that credit unions’ interests were represented. As a result of our efforts: •
All but three credit unions will be exempt from examination and enforcement by the Bureau of Consumer Financial Protection.
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Credit unions will not have to pay for the new agency.
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The Chairman of the NCUA will serve on the oversight council reviewing the Bureau’s rules.
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Credit unions will not be required to offer plain vanilla products to their members before offering products that may better meet their needs.
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Credit unions will not have to collect deposit account data and report it to the Bureau.
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Credit unions will not be subject to the Community Reinvestment Act, and the Bureau will not have authority over the CRA.
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The legislation included language that CUNA inspired which directs the Bureau to review and address outdated, unnecessary and unduly burdensome regulations with the intent of reducing regulatory burden.
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Finally, the new law directs the Bureau to take into consideration the impact of its regulations on credit unions.
Also as a result of our efforts during the regulatory reform process, the $250,000 NCUSIF Share Insurance limit was made permanent; credit unions helped to defeat an amendment that would have imposed a usury ceiling on financial institutions; we were able to keep an amendment limited ATM fees to $.50 from being offered; credit unions helped change the “skin in the game” provision so that most credit union mortgages would be exempt; we worked with the Department of Treasury to draft compromise remittances language, essentially exempting international wire transfers initiated by credit unions; and we successfully modified the legislation to keep credit unions from having to pay into the funeral fund for huge, failing, for-profit financial companies. Each of these changes was made during an exhaustive legislative process. Several of them would not have happened without grassroots action from Leagues and credit unions. Unfortunately, we did not bat 1.000 on the regulatory reform bill. Banks and credit unions alike suffered a great loss on the Durbin interchange amendment. Despite the tremendous grassroots effort, we were not able to get this provision removed from the legislation in the conference committee; however, because of that effort, we were able to get modest modifications made. This was a loss for credit unions, no doubt about it, but it was not a credit union loss. Now that the provision is law, CUNA is working to make the small issuer carve-out – the primary reason so many Senators voted for the provision – meaningful. And, we are carefully watching the recently filed lawsuit challenging the constitutionality of this provision. Finally, credit unions have made a very strong push during the 111 th Congress on Member Business Lending. Representative Paul Kanjorski and Senator Mark Udall introduced legislation to increase the cap, and with help from the cosponsors of this
legislation, we worked with the Department of Treasury to get Administration support for our effort. We were unable to get the MBL bill attached to the small business lending legislation Congress considered late in the session for a variety of jurisdictional and political reasons, we were able to get provisions included in that legislation to help credit unions do more business lending, including the continuation of reduced SBA fees and increased SBA loan limits, and federal support for state-run capital access programs. Still, our efforts to enact the MBL bill continued until the end of the Congress when the Senate considered the Udall legislation, but was unable to approve the measure by unanimous consent. Efforts to enact this legislation are expected to be renewed in 2011.