This fall's congressional elections have clouded prospects for the Credit Union Regulatory Improvement Act, the regulatory relief bill crafted just for credit unions, as lawmakers prepare to pass pared-down regulatory relief for all financial institutions.
If Republicans keep control of the House in November, the party's leaders have vowed to push forward the credit union bill.
Rep. Spencer Bachus, R-Ala., who is widely expected to be the next chairman of the House Financial Services Committee, if the Republicans preserve their majority, told the National Association of Federal Credit Unions' Congressional Caucus last week that the legislation would be among his top priorities in the next Congress. Any additional regulatory relief would have to be joined with additional relief for banks and other interests, he said.
But just before that, Rep. Barney Frank, D-Mass., who would be the panel's chairman if the Democrats win control of the House, said he would wait to see how the current regulatory relief effort plays out before moving on additional relief for credit unions.
Either way, both the bill's chief sponsors, Rep. Ed Royce, R-Calif., and Rep. Paul Kanjorski, D-Pa., promised the NAFCU conference to reintroduce the legislation next year.
Meantime, the bill, which has about 15 major provisions for credit unions, is expected to be expanded to include additional items next year. Among these are measures to let community-chartered credit unions add low-income communities to their fields of membership - something the National Credit Union Administration was forced by the courts to prohibit this year - and to curb credit union conversions to savings bank charters.
The NCUA board, which was forced by an American Bankers Association lawsuit to bar community charters from its "underserved" expansions, has already begun lobbying Congress to lift the ban.
And Rep. Patrick McHenry, R-N.C., who sought to rein in the NCUA's powers over credit union conversions, said at the conference that he is interested in getting more people onto the NCUA board who are knowledgeable about credit unions.
The lawmakers' remarks came as Congress was putting the finishing touches on regulatory relief for banks, thrifts, and credit unions.
Several major credit union priorities were dropped from the bill that passed the House last year.
These would have let credit unions retain their select employee groups after converting to community charters; let privately insured credit unions join the Federal Home Loan Bank system; empowered the NCUA, instead of Congress, to specify permissible investments; and lifted the cap on member business loans. Also dropped from the bill was a top priority - enacting a risk-based capital system for credit unions. All these provisions are included in the credit union-only bill.
