WASHINGTON – A leading congressional credit union ally is expected to introduce a new regulatory relief bill for credit unions as early as today that would have some, but not all of the provisions in CURIA, in an effort aimed at expediting the long-stalled credit union initiative.
The bill, being drafted by CURIA co-sponsor Paul Kanjorski of Pennsylvania, would ease restrictions on member business loans by exempting both religious loans and loans made in underserved areas from the current 12.25% of assets cap on MBLs. However, it would not raise the cap to 20%, as written into CURIA, in an effort to alleviate one of the main sticking points for the bankers, sources told The Credit Union Journal last night.
As is the case with CURIA, the bill would expand the ability to add underserved areas to community chartered credit unions.
Another similarity to CURIA: the new bill would allow credit unions to retain their select groups after converting to community charter–but only with the approval of NCUA.
The bill also would allow credit unions to make payday loans to non-members within their fields of membership, just as credit unions last year were allowed to provide check cashing and wire transfer services for non-members within their FOMs.
One measure would help more credit unions make loans guaranteed by the U.S. Small Business Administration by easing conflicts between NCUA and SBA regulations, the sources said.
The new bill, however, would not enact a risk-based capital system for credit unions, as CURIA would do.
Sources said by removing the CURIA provisions to raise the business loan cap to 20% and for risk-based capital, both of which are opposed by the banks, the bill may have a better chance of moving through Congress than CURIA, which has lingered for five years.
Introduction of the bill comes as the House Financial Services Committee is preparing to hold a hearing next Thursday on regulatory relief for credit unions and CURIA. Representatives from NCUA, CUNA, NAFCU and NASCUS are expected to testify at the hearing.
