Reg Relief Unlikely To Include Risk-Based Plan

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The Senate Banking Committee is expected to vote on a regulatory relief bill this week that won't include the risk-based capital proposal being pushed by NCUA.

The Senate bill is apparently similar to one approved overwhelmingly by the House last month and includes few controversial items-like the credit union provision-in order to ease its way to final passage, according to Capitol Hill sources.

Also not included in the bill is a credit-union favored provision that would make it harder for credit unions to convert to mutual savings banks by requiring that at least 20% of members participate in a vote. To include that in the Senate bill would invite a major debate between the credit union side and the bankers, who are trying to make it easier for credit unions to convert to savings banks.

The absence of the risk-based capital proposal, favored by NCUA and the major credit union lobby groups, diminishes the chances of the proposal being passed anytime in the near future. If one or more lawmakers were to move to include it in the regulatory relief package it would invite the opposition of the banking lobby and complicate final passage of the measure.

Though the risk-based capital proposal is included in CURIA-the CU Regulatory Improvements Act-that bill is unlikely to be voted this year, if ever. That means a risk-based capital system for credit unions is probably years away from being enacted.

The Journal's Ed Roberts can be contacted at eroberts

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