WASHINGTON – The credit union lobby said “thanks, but no thanks” to a proposal to add regulatory relief provisions of the CU Regulatory Improvements Act–CURIA–today to legislation that would bar Wal-Mart banks, saying the proposal would give much more to banks than to credit unions.
“We appreciate the efforts to bring regulatory relief to the forefront and onto the Senate agenda, but we can’t support the amendment because it tilts too far in favor of banks and thrifts and not enough towards credit unions,” Brad Thaler, a senior lobbyist for NAFCU, told The Credit Union Journal yesterday.
He was referring to an amendment filed by Idaho Sen. Michael Crapo which would add about a dozen regulatory relief provisions to a bill to bar commercial entities, such as Wal-Mart Stores, from owning bank-like Industrial Loan Companies. The bill is expected to be voted today by the Senate Banking Committee.
The Crapo proposal, which has the backing of Nebraska Sen. Chuck Hagel and as many as two other members of the Banking Committee, would: expand banking exemptions from the Sarbanes-Oxley Act; extend the examination schedule for community banks; increase business loan limits for thrifts; eliminate auto loan limits for thrifts and allow banks to offer interest on business checking accounts.
It would do much less for credit unions, including: slightly lift the limit on member business loans by exempting religious-based loans; increase the cap in investments in CUSOs; exempt credit unions from pre-merger notification to federal antitrust regulators and allow privately insured credit unions to join the Federal Home Loan Bank system.
Most of these provisions were included in a regulatory relief bill that passed the House in the last Congress but was scaled back before passage by the Senate, and several are included in CURIA.
But most conspicuous is the absence of the highest CURIA priorities, including: enacting a risk-based capital system for credit unions; raising the limits on member business loans from the current 12.25% of assets to 20%; allowing credit unions that convert to community charters to retain their select groups and raising the voting threshold on credit unions converting to mutual savings banks.
Ryan Donovan, senior lobbyist for CUNA, said it will not support the amendment as it was worded but hope the senators’ efforts will bring the issue of regulatory relief, and thus CURIA, to the front of the congressional agenda.
“It doesn’t do enough for credit unions,” said Donovan, “but it has given us the opportunity to talk about some of these things with the Senate Banking leadership.”
