The latest version of the Financial CHOICE Act, unveiled by House Financial Services Chairman Jeb Hensarling (R-Texas) this week would provide credit unions with much-needed regulatory relief, Ryan Donovan, CUNA’s chief advocacy officer said Friday.
And while Donovan said the legislation isn’t perfect, it can be improved as it moves through the legislative process.
“There’s an incredible amount of relief in this bill that would benefit credit unions,” Donovan said.
And he added, “You really have to look at this with a very long lens. At this stage, it doesn’t have to be a perfect bill.”
Hensarling this week released his latest version of the bill that would overhaul the Dodd-Frank. His committee will hold a hearing on the bill on April 26. Democrats already have condemned the measure, saying it would neuter the CFPB.
CUNA has released an initial analysis of the measure, specifying areas that they believe will help credit unions, those that the association cannot support and provisions they would like added to the bill.
Provisions that CUNA said will benefit credit unions include those that would:
- Require increased analysis before agencies release rules, including cost-benefit and economic analyses.
- Remove the CFPB’s power to issue rules and take enforcement actions based on Unfair, Deceptive or Abusive Acts or Practices. However, banking regulators would retain such powers.
- Repeal the Durbin Amendment on credit card fees.
- Restrict additional powers that the CFPB currently has. The agency would be prohibited from issuing rules governing mandatory arbitration agreements and would be brought into the regular appropriations process.
- Provide additional appeal powers for financial institutions exams.
- Repeal the Department of Labor’s fiduciary rule.
- Repeal the Dodd-Frank provision that gives the CFPB deference in the interpretation of consumer finance protection laws.
Provisions that CUNA said it opposes include ones that would:
- Bring the NCUA into the regular appropriations process.
- Prohibit the CFPB from issuing rules governing payday lending. CUNA officials said that the proposed CFPB rules would have restricted credit unions offering safe and affordable loans. However, they said that some type of rule should be issued to govern egregious behavior by some nonbank lenders.
- Allow big banks to grow even bigger by removing the 10% domestic deposit exemption.
- Allow federal savings and loan associations to operate with the duties and responsibilities of national banks, thereby circumventing the member business lending cap that restrict thrifts. CUNA said it could accept that provision if credit unions are offered a similar provision.
Provisions that CUNA would like added to the bill include ones that would:
- Provide small financial institutions with exemptions from certain rules designed to govern larger institutions.
- Create a five-person CFPB commission, rather than the agency design proposed by Hensarling which would have the agency directed by a single person.
- Allow loans made for the purchase of a 1-4 non-owner occupied residential property to be exempt from the member business lending cap.
