WASHINGTON – The credit union lobby was hopeful with a compromise lawmakers arrived at yesterday that will exempt 98% of all credit unions from being examined by the new Consumer Financial Protection Agency but was withholding its support until they can obtain an exemption for all credit unions.
"We don’t think it goes far enough," said NAFCU Chief Lobbyist Dan Berger, of the amendment to the consumer protection bill that would exempt all credit unions under $1.5 billion and all banks under $10 billion from the supervisory oversight of the agency, leaving that instead to their existing regulator.
The exemption would cover all but about 75 of the nation’s largest credit unions.
Asserting that credit unions and community banks were not the main cause of the current credit crisis, the House Financial Services Committee approved the amendment during yesterday’s debate on the bill, which would create a new agency to oversee compliance with rules on mortgages, credit cards, investments and insurance products. Democratic leaders who are pushing the bill supported the partial exemption for smaller credit unions and banks as a way to attract support among their colleagues. The support is important because the bill is overwhelmingly opposed by Republicans who see it adding to regulatory burden.
The committee is expected to complete its work on the bill next week, before sending it for a vote by the full House.
CUNA said yesterday it is also holding out for a universal exemption for credit unions as the bill progresses to the floor of the House, then on to the Senate for deliberations.
Under the amendment approved yesterday, NCUA or the state regulator would have responsibility for examining a credit union for compliance with consumer laws. But the new agency would have ultimate jurisdiction over enforcement issues if it disagrees with the regulator.
