WASHINGTON – Credit union lobbyists expressed satisfaction last week that the financial services reform package passed by the House will have a limited impact on credit unions and they will now focus their attention on the Senate, which is expected to take up the legislation early next year.
"We will continue to work with members of the Senate and the Obama administration to help consumers and promote our nation’s economic growth. We believe that together we can successfully achieve this without negatively impacting credit unions," said NAFCU President Fred Becker, after the House passed the reform package Friday afternoon.
The reform package, a 1,300-page combination if eight bills, will: create a Consumer Financial Protection Agency, a systemic risk regulator and a national office of insurance regulation; set new standards for Wall Street rating agencies; regulate financial derivatives; combine various banking agencies and allow shareholders to weigh in on executive pay, among other things.
The credit union lobby was able to limit the effect of the consumer agency on credit unions by getting an amendment attached to the bill that will exempt all federally insured institutions under $10 billion from being examined by the agency and giving the agency authority to delegate examinations for entities over that size to their current regulator. Ryan Donovan, senior lobbyist for CUNA, said CUNA and the leagues, which were instrumental in getting the credit union carve-out included in the bill, will continue to work with the Senate to ensure that similar language survives a final bill.
Donovan also expressed confidence that the so-called cramdown provision defeated by the House Friday will not resurface again, citing less support for the measure than earlier this year when the House passed it, only to have it defeated in the Senate. That measure, opposed by credit unions and banks, would allow at-risk homeowners to ask a bankruptcy court to amend the terms of their mortgages. “We opposed this provision because we believed it had the potential to do long-term damage to the mortgage market and undermine the safety and soundness of credit unions,” said CUNA President Dan Mica.
The financial reform bill faces steep odds at it moves to the Senate, as it was passed by the House amid unanimous opposition from Republican members. The Republicans in the House argued that the bill will amount to a huge overreach of government powers and leave unresolved many of the problems that led to the recent crisis. They argue that it would create unnecessary new layers of bureaucracy and stifle financial innovation.
"We are left with a perpetual Wall Street bailout bill," Rep. Jeb Hensarling, R-Tex., an outspoken critic, said during Friday's debate. "We are left with a bill that will crush job creation at a time when our nation needs to be creating jobs. We have a bill that assaults the fundamental economic liberties of every American citizen."
