WASHINGTON It was a big day for credit unions on Capitol Hill Tuesday, as three bills that aim to give CUs some long-sought regulatory relief passed the House of Representatives.
The three pieces of legislation will:
1. Allow privately insured CUs to join the Federal Home Loan Bank system.
2. Give parity for credit unions on certain trust accounts, including Interest on Lawyers Trust Accounts (IOLTAs), allowing them to protected by the National Credit Union Share Insurance Fund as these accounts in banks are backed by the FDIC Deposit Insurance Fund.
3. Establish a process to appeal if the Consumer Financial Protection Bureau has not recognized an area as “rural.”
The credit union trade associations said the three bills are significant victories for the community.
Brad Thaler, VP of legislative affairs for the National Association of Federal Credit Unions hailed the House passage of NAFCU-sought H.R. 3468, the “Credit Union Share Insurance Fund Parity Act.”
“We applaud the House for passing such important legislation for credit unions,” Thaler said in a prepared statement. “Parity for credit unions on Interest on Lawyers Trust Accounts (IOLTAs) is a key element in NAFCU’s five-point plan for regulatory relief, and we look forward to working with the Senate to advance this legislation.”
Bill Cheney, president and CEO of CUNA, noted the trade group sent a letter to all members of the House Monday urging passage of all three pieces of legislation.
“CUNA and the Leagues have been pushing these regulatory relief items for some time,” Cheney said. “In fact, CUNA placed the issue of federal credit union insurance on lawyers’ trust accounts (and others) before the House Financial Services Committee for its consideration.”
Beyond that, Cheney continued, “These regulatory relief bills are credit union stand-alone bills, which passed the House on their own merits and not as part of a big roundup of many stakeholders' legislative agendas. Credit unions, the state credit union associations and CUNA have taken their regulatory burden story to Capitol Hill and federal lawmakers are listening to our story.”
The House of Representatives passed by unanimous consent H.R. 3584, “The Capital Access for Small Community Financial Institutions Act,” which had been introduced by Representatives Steve Stivers (R-Ohio) and Joyce Beatty (D-Ohio). The bill seeks to correct a drafting error in the Federal Home Loan Bank Act that prohibits state chartered, privately insured credit unions from joining the FHLB system.
The House also passed H.R. 2672, the “CFPB Rural Designation Petition and Correction Act,” which NAFCU said would be helpful to small creditors, including credit unions, by offering relief to lenders providing certain mortgages in rural areas. The bill would establish a process to appeal if the CFPB has not recognized the area as “rural.”
