The House Financial Services Committee finally introduced its latest version of a regulatory relief bill for banks and credit unions-but conspiciously left out an NCUA-backed proposal to enact risk-based capital system for credit unions.
The bill, like the one passed by the House in the last Congress, includes about a dozen credit union priorities, including allowing credit unions to keep their select groups after converting to community charters; letting them provide limited services to non-members; and allowing privately insured credit unions to join the Federal Home Loan Bank System.
But lawmakers drafting the bill suspiciously left off the NCUA's risk-based capital system, which has become the top credit union priority and had been endorsed by several lawmakers.
Some observers wondered if the omission was a pay-back by Rep. Jeb Hensarling, the Texas Republican who drafted the bill an who represents the Dallas area where Community CU is based.
Hensarling has been one of the most vocal congressional critics of NCUA's actions in the Community CU case and even organized a letter, signed by 22 Texas House members, to NCUA in opposition to the agency's actions. "He's up in arms about it," said one source.
But credit union lobbyists said the omission of the new powers by NCUA to set its own risk-based capital standards simply reflects a lack of consensus on the issue on the Financial Services Committee, where the leadership wants to present non-controversial bill in order to ease its passage.
"This means we'll have to work harder (to convince lawmakers to include the measure later)," said CUNA lobbyist Gary Kohn.
The bill also does not include any of the provisions reviewed by Hensarling that would roll-back some of NCUA's powers to regulate and oversee credit union conversions to mutual savings banks.
A Hensarling spokesman said the Congressman is interested in participating in those efforts, embodied in a bill introduced last month by Rep. Patrick McHenry, R-N.C., but has not signed on to that bill and has yet to decide on how he will approach the issue.
The bill does, however, include a provision that would ease new rules on accounting for mergers to allow credit unions to continue 'pooling,' or combining their net worth after merging.
It would also allow credit unions to provide check cashing and wire transfer services to non-members within their fields of membership, a rule that has been adopted by eight states over the last two years.
The bill would also: ease the current limits on member business lending; allow NCUA, instead of Congress, to set new limits on loan maturities, permissible investments, and investment limits on Credit Union Service Organizations; exempt credit union mergers from prenotification requirements under the Hart-Scott-Rodino Act.
Because Congress left town last week for the month of August, the committee will not start working on the bill in earnest until September.
The Senate is expected to wait until September before introducing its own regulatory relief bill.
A credit union-only regulatory relief bill, the CU Regulatory Improvements Act, or CURIA, has most of the same credit union provisions in it as the bill introduced last week in the House but is expected to be rolled into the Reg Relief bill eventually.
