Two major credit union allies on Capitol Hill introduced a new bill in Congress last week that would provide a variety of regulatory relief provisions, including expansion of business lending and membership authority and a new risk-based capital system.
The bill is similar to the one introduced on the last Congress and bears the same name-the CU Regulatory Improvements Act-or CURIA, and was authored by Democratic Rep. Paul Kanjorski of Pennsylvania, one of the two sponsors of HR 1151, the landmark CU Membership Access Act of 1998, and Republican Ed Royce of California, a long-time credit union champion and another co-sponsor of HR 1151. Another dozen lawmakers, evenly split between the two parties, have also signed on as sponsors of the initial bill.
The new version of CURIA is similar to the old one and would allow federal credit unions converting to community charters to retain their select employee groups, would lift the current 12.25% (of assets) cap on member business loans, allow federal credit unions to offer check cashing and wire transfers to non-members within their fields of membership, and would require that at least 20% of members vote on proposals to convert a credit union to a mutual savings bank.
But the bill also has a few new features, including the implementation of a risk-based capital system to replace the current system of prompt corrective action, or PCA, for credit unions, and a new definition of net worth for credit unions that will enable them to circumvent the pending Financial Accounting Standards Board rule prohibiting pooling, or combining, net capital after mergers.
"The goal from here," said CUNA lobbyist gary Kohn, is to build co-sponsors, push for another hearing, and hope we can garner enough support," he said, of CUNA's aim to get the 64 remaining members of Congress (of 69) who signed as co-sponsors to the last bill, and an ultimate goal of 100 sponsors.
The bill could also serve as a mark for an omnibus regulatory relief bill for financial institutions, serving as the credit union chapter for such a bill, Kohn noted.
The House Financial Services Subcommittee on Financial Institutions held a hearing on CURIA in the last Congress, but never voted on the bill, allowing the measure to die at the end of Congress. The Senate, which must also vote on any reg relief bill, has yet to introduce a bill.
The bill would lift the current 12.25% (of assets) cap on member business loans, allow federal credit unions to offer check cashing and wire transfers to non-members within their fields of membership, and would require that at least 20% of members vote on proposals to convert a credit union to a mutual savings bank.
But the bill also has a few new features, including the implementation of a risk-based capital system to replace the current system of prompt corrective action (PCA) for CUs, and a new definition of net worth for credit unions that will enable them to circumvent the pending Financial Accounting Standards Board rule prohibiting pooling, or combining, net capital after mergers.
"The goal from here," said CUNA lobbyist Gary Kohn, is to "build co-sponsors, push for another hearing and hope we can garner enough support," he said, of CUNA's aim to get the 64 remaining members of Congress (of 69) who signed as co-sponsors to the last bill, and an ultimate goal of 100 sponsors.
