From the outset, 2013 was marked by an ongoing onslaught of new rules proposed by the Consumer Financial Protection Bureau (CFPB). And with the implementation of Dodd-Frank Act rules yet to be realized and no end in sight to the continuing disappearance of credit unions - we have lost more than 800 since its implementation - the concern over regulatory overload cannot be overstated.
At NAFCU, we were keenly aware of the already overwhelming burden of regulations and set relief as our goal: We began in February by introducing a five-point plan for regulatory relief and presenting it to every member of Congress. The five-point plan seeks regulatory relief through administrative improvements in powers for the National Credit Union Administration (NCUA), capital reforms, structural and operational improvements for credit unions and data security reforms.
Legislation Pending
Key elements of our five-point plan for regulatory relief were swiftly incorporated into several pieces of legislation: H.R., 2572, the "Regulatory Relief for Credit Unions Act," from Rep. Gary Miller, R-Calif.; and H.R., 688, the "Credit Union Small Business Jobs Creation Act," from Reps. Ed Royce, R-Calif., and Carolyn McCarthy, D-N.Y. Complementary legislation, S. 968, the "Small Business Lending Enhancement Act of 2013," was introduced in the Senate by Sen. Mark Udall, D-Colo., and Sen. Rand Paul, R-Ky. H.R. 719, the "Capital Access for Small Businesses and Jobs Act," was introduced by Reps. Peter King, R-N.Y., and Brad Sherman, D-Calif.
These relief bills enjoy bipartisan support, and NAFCU is optimistic that the coming year will bring action and help inject more reasonableness into the regulation of credit unions. In the meantime, a few other improvements sought by the association appear to be nearing the finish line:
H.R. 749, the "Eliminate Privacy Notice Confusion Act," introduced by Reps. Blaine Luetkemeyer, R-Mo., and Sherman, would remove the requirement for credit unions to mail privacy notices yearly to members even when they don't change their policies. The House-passed bill has a companion measure in the Senate, S. 635, the "Privacy Notice Modernization Act of 2013," introduced by Sen. Sherrod Brown, D-Ohio, and could get final action at any time.
H.R. 3468, the "Credit Union Share Insurance Fund Parity Act," introduced by Reps. Ed Perlmutter, D-Colo., Royce, Miller and Sherman has been reported out of the House Financial Services Committee. The bill would help ensure credit unions have parity with FDIC-insured institutions when it comes to escrow accounts such as Interest on Lawyers Trust Accounts.
Breathing A Little Easier
In addition, credit unions can breathe a little easier under a delayed compliance deadline provided by CFPB's final mortgage disclosure rules. NAFCU sought at least a 12-month delay for these rules, which implement combined disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act. CFPB listened, giving the industry until Aug. 1, 2015 to comply.
The past year has seen developments in other critical areas as well, among them the ongoing court case over the Federal Reserve's regulation on debit interchange fees. On July 31, federal district court Judge Richard Leon declared the Fed's regulation invalid because it set the interchange fee cap too high and inadequately addressed network non-exclusivity. NAFCU is working to preserve credit unions' ability to generate revenue to support their card services for members.
We also pressed the NCUA on a number of issues including providing greater transparency and efficacy on the budget, enacting clearer examinations for all credit unions and preventing the finalization of unnecessary rules. We commended NCUA's persistence in seeking recoveries on the sale of faulty securities. The agency will receive $1.417 billion from JPMorgan Chase settlement in recompense for losses to corporate credit unions. We believe this bodes extremely well for decreasing the need for future assessments or maybe even returning excess funds to credit unions at a later point in time.
Looking ahead, next year promises to be equally demanding. At the current rate, the heavy pace of regulation could contribute to the elimination of more than 200 credit unions a year. NAFCU will continue our vigilance and pressure on the regulators and legislators to mitigate the negative impact on credit unions - our future depends on it.
Dan Berger is president and CEO of NAFCU.
