WASHINGTON – House leaders are expected to propose extending an exemption for credit unions under $1.5 billion from examinations by the new Consumer Financial Protection Agency to all credit unions under $10 billion – exempting all but three giants from the majority of oversight by the new agency.
The move, expected to be added during next week’s floor debate over the agency, would match an exemption provided for banks of $10 billion or less and has been sought by the credit union lobby, CUNA and NAFCU, which are also seeking to exempt the other three giants, Navy FCU, Pentagon FCU and North Carolina State Employees’ CU.
Both NAFCU and CUNA have been lobbying Congress to expand the credit union carve-out since the House Financial Services Committee passed the consumer protection bill with the exemption set at $1.5 billion. "Though we appreciate the efforts toward parity, NAFCU has a longstanding policy against bifurcating and splitting the credit union industry with a low arbitrary number and continues to oppose having credit unions under CFPA, no matter who does the exams and enforcement of CFPA rules because we did not cause this crisis," said Dan Berger, chief lobbyist for NAFCU.
Under the proposal, credit unions would be examined for compliance with consumer rules and laws by their functional regulator, NCUA or state credit union supervisors. Still, credit unions and banks would be required to comply with any new regulations devised by the agency, which would also have the ultimate authority to enforce rules and laws.
The move comes as NCUA is developing plans for its own office of consumer protection, to be launched early next year.
The consumer protection bill is expected to be combined next week with bills to create a so-called systemic risk regulator, to tighten regulation of financial derivatives and to create a national office to regulate insurers.
