NAFCU Writes Senate Banking Committee Leaders Urging Swift Action on Reg Relief

ARLINGTON, Va.-NAFCU recently wrote Senate Banking Committee Chairman Richard Shelby (R-Ala.) to request that regulatory relief legislation be introduced quickly in the Senate-NAFCU also made some suggestions for the substance of the proposed bill. “We realize that as Congress returns from the August recess there will be a number of important issues competing for you and your colleagues’ attention; we hope that under your leadership the Banking Committee will give high priority to crafting a bill to provide needed regulatory relief to federal credit unions,” NAFCU’s letter read. The trade group recommended the Financial Services Regulatory Relief Act (H.R. 1375) as a solid start. NAFCU added that it would like to see the removal of credit unions’ statutory member business lending restrictions, or at least parity provided with thrifts in the bill at 20% rather than 12.25% of assets. The group also asked that the “reasonable proximity” requirement with regard to having a physical presence within reasonable proximity of the location of the group to be served be relaxed. NAFCU’s letter explained, “This can particularly hurt the growth opportunities for smaller credit unions who may be willing to serve a certain population, and have the means to do it through today’s `clicks and windows’ technology, but do not have the resources to establish a `bricks and mortar’ presence.” Additionally, NAFCU requested that the legislation remove the term “local” from in front of community for community charters. Again, NAFCU said technology makes this language obsolete. “Today’s dynamic financial marketplace characterized by `cyber-banking’ technology rather than bricks and mortar makes the word `local’ an extraneous limitation for community-chartered credit unions,” the group wrote. NAFCU’s letter blamed the “local” term for the majority of the federal to state credit union conversions. Finally, NAFCU endorsed NCUA Chairman Dennis Dollar’s suggestion that Congress revisit Prompt Corrective Action laws for credit unions, which he as chief federal regulator of credit unions has concluded “fail to accurately and fully reflect individual risk factors in credit unions.” NAFCU concurs with his assessment, and with his belief that significant benefits could be derived by `amending the FCU Act to adopt a comprehensive risk-based approach.’ ” A copy of the letter was also sent to Senate Banking Committee Ranking Member Paul Sarbanes (D-Md.). [email protected]