ALEXANDRIA, Va. Hundreds of credit unions have quietly qualified for relief from regulatory restrictions on member business loans and raising supplementary capital through NCUA’s low income program, even as Congress continues to hold up decade-long requests for regulatory relief.
Both issues an increase in the MBL cap and allowing credit unions to raise outside capital will be the main focus during tomorrow’s congressional hearing on regulatory relief for credit unions, even as the witnesses add numerous new requests to the wish-list. Meantime, NCUA has qualified almost 2,000 credit unions 800 in the last year as low income credit union, thereby bypassing congressional restrictions on both areas.
NCUA’s initiative has effectively delivered reg relief to these additional LICUs, including some of the biggest credit unions in the country: $2.3-billion Michigan State University FCU; $1.5-billion Polish & Slavic FCU; $1.4-billion Kern Schools FCU; $1.5-billion GTE FCU; $1.1-billion Local Government Employees FCU; $1.1-billion Tyndall FCU; and $1.1-billion Barksdale FCU. Also included on the list are Fresno County FCU ($470 million); Purdue FCU ($740 million); Financial Community FCU ($685 million); Crane FCU ($400 million); Y-12 FCU ($630 million); AltaOne FCU ($560 million); Deseret First FCU ($420 million); and Greater Texas FCU ($520 million).
NCUA’s low income designation exempts a credit union from the 12.25% of assets MBL limit, allows a credit union to raise secondary forms of capital and to accept non-member deposits.
So far, Congress has rejected the MBL and supplementary capital provisions for a decade or more. The credit union lobby groups have indicated they will include other provisions rejected by Congress in the past, including allowing all credit unions to add an underserved community to its FOM, eliminating privacy notice requirements and creating a new appeals process for examinations.
The House Financial Services Subcommittee on Financial Institutions has scheduled a Wednesday hearing on additional regulatory relief for credit unions, part of what is expected to be a long process of drafting a bill. Three credit union executives will appear at tomorrow’s hearing: Robert Burrow, president of Bayer Heritage FCU on behalf of NAFCU; Pamela Stephens, president of Security One FCU; and Michael Reiver, general counsel at New York’s Melrose CU, who was asked to testify by subcommittee Chairman Shelly Moore Capito, a Republican from West Virginia.
The committee is expected to combine information it collects tomorrow with reg relief requests made by the banks to develop common ground for an overall bill.
