WASHINGTON – House members approved language in the financial services reform bill last night that could effectively exempt all credit unions from examinations by the new Consumer Financial Protection Agency.
The language will specifically exempt all credit unions under $10 billion from the examinations–leaving that instead to NCUA or the relevant state regulator–but also give the new agency the authority to delegate examinations for the three credit unions over $10 billion to NCUA or their “functional” regulator if those institutions are considered good players. Those credit unions are: Navy FCU, Pentagon FCU and North Carolina State Employees’ CU.
The language falls short of what some in the credit union lobby had hoped–an exemption for all credit unions from both examinations and enforcement of consumer compliance–but represents a major victory for the credit union lobby, which succeeded earlier in getting an exemption for credit unions for fees to finance any bailout of a large financial institution that could pose a risk to the financial system.
The exemption from examinations by the new agency comes as NCUA is ramping up its own consumer protection efforts with creation of a consumer protection office Jan. 1 that will monitor institutions for compliance with consumer regulations and field individual complaints.
The credit union lobby was also working last night to defeat a proposal that would reintroduce the concept of cramdowns, allowing bankruptcy courts to amend the terms of at-risk mortgages.
Lawmakers were voting late last night on several amendments to the massive bill and were expected to vote final passage this afternoon. The Senate is expected to take up its own version of the massive bill–1,300 pages long–after the first of the year.
The bill would also regulate financial derivatives; create new rules for Wall Street rating agencies; allow shareholders to vote on executive pay packages; combine banking regulators and create a national office of insurance regulation and oversight.
More than 600 credit union executives were flown in this week by CUNA and the leagues to lobby Congress on the bill.
