The much anticipated reg-relief legislation may not see the light of day in 2002

<p>WASHINGTON-Credit union lobbyists are not giving regulatory relief legislation much more than a snowball’s chance in heck of getting very far through congressional machinations this year. CUNA Vice President and Senior Legislative Counsel Gary Kohn commented that he “would not argue” with a prediction that the bill, the brainchild of House Financial Services Committee Chairman Mike Oxley (R-Ohio), would not move forward in the Senate. Senate Banking Committee Chairman Paul Sarbanes (D-Md.) has not expressed interest in it. The legislation is the first reg relief bill to address credit union concerns. Even more negatively, NAFCU Director of Legislative and Political Affairs Brad Thaler said, “The outlook for it being marked up by the full committee even is not outstanding.” However, he pointed out that Oxley is a “master” at moving legislation and he could possibly try to pair regulatory relief with the deposit insurance reform legislation. A provision of the regulatory relief bill permitting the membership of privately insured credit unions in the Federal Home Loan Bank (FHLB) system has met opposition. Normally an ally with CUNA and other credit unions groups, Congressman Paul Kanjorski (D-Pa.) has said he is opposed to privately insured credit unions joining the FHLB system unless safety and soundness concerns are met. CUNA has been strongly in favor of this measure and has been holding meetings with the representative and his staff “to persuade him that the safety and soundness issues are being addressed,” Kohn said. He pointed out that financial institutions have to meet certain criteria to participate in the system. Kohn also noted, “There are plenty of other issues we work very closely together on and he is very supportive of.You can’t expect to have 100% agreement on every single issue you’re out there with.” CUNA and the state leagues recently made special efforts to raise money for Kanjorski’s campaign through individual credit union officials over and above (and legally) the $10,000 the Credit Union Legislative Action Committee of CUNA is permitted by campaign finance law. Congressman Bob Ney (R-Ohio)-who introduced the provision previously in the congressional session as a stand-alone bill-is supporting CUNA’s side of the debate, saying the FHLB system would mean greater safety and soundness for privately insured credit unions. He too is in discussions with Kanjorski. Kanjorski commented during CUNA’s Governmental Affairs Conference on his concerns for the credit union dual chartering system, which could be addressed by limiting the states or enhancing the federal charter. Kohn said he seemed to be leaning toward the latter, but the FHLB provision would only affect state chartered credit unions because federal credit unions must have federal insurance. Still, many states do not allow private insurance and only about 375, according to NASCUS, of more than 10,000 total credit unions are not federally insured. While NAFCU, which represents the interests of federal credit unions, has been a strong advocate of enhancing the federal charter, NAFCU President/CEO Fred Becker stated, “We have never supported the reigning in of the states.” “Members of Congress certainly bring their own perspective to the process,” NAFCU Senior Vice President and General Counsel Bill Donovan added. However, NAFCU shares the congressman’s concerns about privately insured credit unions joining the FHLB system. “We have reservations about that provision in light of what has happened with non-federally insured institutions.” Thaler said. “We think it is an issue that should be examined further and examined separately.” He explained that a number of NAFCU members are concerned about the added element of risk to the system. NAFCU will not oppose the legislation just because of this provision, he clarified. Kohn said that he does not anticipate the provision being removed from the legislation. [email protected]</p>