Several banking and credit union bills are being marked up and debated in Congress in the final days before congressional members leave for August recess.
Among them is a bill, S. 1799, by Sen. Susan Collins (R-Maine) called the Community Bank Sensible Regulation Act of 2015 that will be a “game changer” for community banks, according to American Banker.
The bill was added to a financial service appropriations bill last week and would allow financial regulators to exempt community banks, with fewer than $10 billion of assets, from what would be considered unnecessary or burdensome requirements. The bill would primarily exclude small banks from complying with the Volcker Rule, which prohibits certain speculative investments. It would not exclude banks from complying with CFPB regulations.
Credit unions are not mentioned in the bill, but the NCUA said Monday that it already has that authority and puts it to use.
“NCUA has been attentive to targeted rulemaking, providing credit unions with relief in the form of exemptions or tiered obligations in several areas, including the rule on liquidity and contingency funding, in which only credit unions with assets of $250 million or more must meet all provisions, or the stress testing rule, which applies only to credit unions with at least $10 billion in assets,” NCUA Public Affairs Specialist John Fairbanks said.
NAFCU, however, said the bill by Collins goes “well beyond” the existing authority currently in place. Senior Vice President of Government Affairs and General Counsel Carrie Hunt said the legislation would give the banking regulators the ability to exempt banks from statute, mot just regulations.
“NCUA does not have that authority,” she said.
The bill would also allow the banking regulators to exempt institutions from any statute that touches the banks they regulate, she added, not just the FDIC Act or the Federal Reserve Act.
“NCUA exempts small credit unions from some of its regulations; we want to [be] clear that credit unions of all assets sizes deserve relief from unnecessary rules,” NAFCU Vice President of Legislative Affairs Brad Thaler said.
A phone request for comment from Collins went unreturned as of Tuesday afternoon.
On Tuesday, the House Financial Services Committee marked up four bills that could provide regulatory relief for credit unions. They include H.R. 3192, the Homebuyers Assistance Act, which would provide temporary safe harbor from the Truth in Lending Act/Real Estate Settlement Procedures Act integrated disclosure rule; H.R. 1941, the Financial Institutions Examination Fairness and Reform Act, which would establish an ombudsman outside of the NCUA to handle exam appeals, require that examiners provide credit unions with documentation to support exam exception write-ups and codify examinations standards; H.R. 1210, the Portfolio Lending and Mortgage Access Act, which would provide a safe harbor from certain qualified mortgage requirements for residential mortgage loans held on a mortgage originator's portfolio; and H.R. 766, the Financial Institutions Customer Protections Act, which would require federal regulators to provide a material reason for ordering financial institutions to terminate account relationships through the Justice Department's Operation Choke Point initiative.
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