WASHINGTON -
Among the provisions Congress might consider are those creating a risk-based capital system for credit unions and easing restrictions on member business lending to non-profits, Chairman of the House Financial Services Committee Barney Frank, told about 400 attendees to NAFCU's Congressional Caucus.
Frank's remarks were echoed by Paul Kanjorski, the Pennsylvania Democrat who drafted the credit union bill, even as the legislation topped 125 House sponsors last week, a significant showing of support.
Frank promised the credit union executives a hearing on CURIA before his committee, but said even if the bill were to get through the financial services panel, Congress is focused on so many other issues that CURIA would have long odds against it. "I do not see any significant chance whatsoever that CURIA, as it stands, will pass both the House and the Senate in its entirety," Frank said. "There is a chance that we could pass some significant pieces of it."
In the Senate, where the bill has yet to be introduced despite three tries in the House, the prospects are even more murky. Sen. Bernard Sanders, the independent from Vermont who promised last year he would introduce CURIA in the Senate if he were elected, backed off that promise last week. After speaking at the NAFCU conference, Sanders said he merely meant to lend his support for the bill, if and when it is introduced in the Senate, but he is not preparing to do so himself.
The credit union lobby was undeterred, however, pointing to Frank's suggestion that they could get as much as 80% of the bill passed. "We continue to push the whole package," said Brad Thaler, senior lobbyist for NAFCU.
NAFCU president Fred Becker said they will continue to lobby for the entire bill and wait to see how the political landscape settles after a hearing. "We're going to have to wait for the hearing and see where it goes from there," said Becker.
CUNA representatives also promised to lobby for the whole package. "It's his approach. He's the chairman and we'll have to accept that," said John Magill, chief lobbyist for CUNA, of Frank's remarks. "In the end of the day, if he ends up passing all of the significant elements in the bill, that's what's important."
"We're gong to try and get some major elements of CURIA passed," said Magill. "Our biggest challenge is going to be in the Senate."
The credit union bill, officially the CU Regulatory Improvements Act, has five major provisions. It would: enact a risk-based capital system for credit unions; extend underserved expansions to community charters (barred by a court action); allow all federal credit unions converting to community charters to retain their select groups; increase the maximum allowable member business loans for a credit union form the current 12.25%; and make it harder for credit unions to convert to mutual savings banks by requiring at least 30% of all members vote on the charter switch.
Frank also indicated he plans to hold hearings next year on expanding the Community Reinvestment Act beyond banks and S&Ls and the possibility of adding credit unions will be explored. While he stated he does not believe single-sponsor or multiple-sponsor credit unions should have to be required to prove they serve their field of membership, it is not so clear with community charters.
Some kind of trade-off between CRA for community charters and one or more of the CURIA provisions may be part of a deal offered to credit unions, several lobbying sources suggested.
The congressman, a major supporter of CRA, noted that credit unions in Massachusetts have been operating under CRA for years.
