WASHINGTON-The credit union community's efforts to usher the Financial Services Regulatory Relief Act (H.R. 1375) through the House paid off with a 392-25 vote in favor of passage last Thursday, March 18, just as credit union relief legislation gains steam. CUNA Vice President for Legislative Affairs and Senior Legislative Counsel Gary Kohn said that many of those 25 who voted against it were protesting the Industrial Loan Company provision, which had been one of the sticking points in the bill. However, an agreement was reached, on the House side anyway, between Congressmen Paul Gillmor (R-Ohio) and Financial Services Ranking Member Barney Frank (D-Mass.), which apparently patched the problem. NAFCU Director of Legislative and Political Affairs Brad Thaler explained that the agreement is that ILCs operating with an 85% or more interest in financial services would be permitted to interstate branch. Regarding the passage of the bill, Kohn stated, “Our efforts played a significant role.” CUNA made and received several calls to and from Congress confirming that he said, adding that committee members had told CUNA they were by far the largest supporters of the bill. He said that the banking lobbyists had begun calling H.R. 1375 “the credit union bill,” since they were not supporting it because of the credit union provisions. Kohn agreed with the bankers in that respect. “It is. It is a significant win for credit unions,” he commented. NAFCU President and CEO Fred Becker thanked the regulators and legislators involved in the bill for their hard work and took some credit for themselves as well. “NAFCU was the earliest advocate for credit union regulatory relief now contained in H.R. 1375 and has worked diligently with House Financial Services Committee members and others in bringing the bill to the House floor,” NAFCU President and CEO Fred Becker said. “Chairman Mike Oxley, Subcommittee Chairman Spencer Bachus and Ranking Committee Member Barney Frank, along with the principal sponsors of the bill, Representatives Shelley Moore Capito and Mike Ross, deserve tremendous credit for the strong vote in its favor in the House.” NCUA Chairman Dennis Dollar also issued a statement following the bill's passage, applauding the House's approval. “For the past three years, NCUA has been working closely with the Committee on this important legislation which was initiated when Chairman Oxley contacted agency heads in the financial regulatory arena and asked for our suggestions of statutory changes that could benefit us in our safety and soundness responsibilities as the industries we regulate adjust to a changing and dynamic marketplace. The vast majority of NCUA's recommendations were included in the 13 credit union provisions that are a part of this 54 section bill, which provides appropriate regulatory relief for credit unions, banks and thrifts.” Though the bill has passed the House now, a bill has yet to be introduced in the Senate and now, according to Kohn, the Senate Banking Committee is considering holding hearings on the matter prior to introducing a bill. But the House passage of the bill last week “will make it more difficult for the Senate to ignore it.” The ILC issue may still be a hang up in the Senate despite the House compromise. “I don't think it takes care of all the problems for some of the ILC supporters, but I think it's enough so they can overcome any obstacles in the House,” CUNA's Kohn said prior to the bill's passage. The ILC issue was not the only obstacle the regulatory relief bill had to overcome in the House. “They also have a couple of budget related problems,” Kohn had explained. “One has to do with the impact of Subchapter S. My understanding is they may be able to get a waiver out of that one.” The House Financial Services Committee is operating under an agreement that legislation should be budget neutral, so the expenses of one program have to come from another. The other budgetary issue had to do with the small amount of money the Congressional Budget Office said it would take to reinstate the law to allow credit unions building on military bases to lease the land for a nominal amount. Thaler said that NAFCU had been working with Financial Services Committee Chairman Mike Oxley (R-Ohio) and Financial Institutions Subcommittee Chairman Spencer Bachus' (R-Ala.) staff on the issue. Basically, CBO said the provision would cost the government $2 million over five years, but the money to offset it was found prior to bringing it to the floor, Thaler said. Earlier in the week, Kohn emphasized that it was particularly important for credit unions to maintain their focus on regulatory relief and the Credit Union Regulatory Improvements Act (H.R. 3579) last week in the wake of the banking industry's efforts to side track credit unions with the taxation issue. “We want to send a strong message to them that we will not be distracted and that we will continue to push our agenda as well as to fight our battles against the banking industry,” he said. On the Senate side, Thaler emphasized, Senator Michael Crapo (R-Idaho), who has been tasked with drafting the bill in the Senate, remains interested in regulatory relief. He added that one of the senator's staffers helped work on the bill in the House. However, Thaler cautioned that the Senate is a “more deliberative” body and that the House took three years to get this far, so the Senate bill could still be a ways off. Senator Crapo is also up for reelection this year. As H.R. 1375 has crawled its way through the House, CURIA, which provides much of the same regulatory relief specifically for credit unions plus some key improvements, has gained a number of co-sponsors. Representatives Jim Gibbons (R-Nev.); Raul Grijalva (D-Ariz.); Anne Northup (R-Ky.); Frank Pallone (D-N.J.); Steve Rothman (D-N.J.); Tim Ryan (D-Ohio); Rob Simmons (R-Conn.); Louise McIntosh Slaughter (D-N.Y.); Bart Stupak (D-Mich.); and Lynn Woolsey (D-Calif.) all signed onto the bill March 9. Including the original sponsors, Congressmen Ed Royce (R-Calif.) and Paul Kanjorski (D-Pa.), 33 lawmakers from both sides of the aisle have signed onto the bill. “Notably, the cosponsors to the Credit Union Regulatory Improvements Act continue to grow.” NAFCU's Thaler said. ” A bipartisan group is shaping up so we're pleased to see continued strong support for that legislation.” On the eve of the House taking up the bill, NCUA Chairman Dennis Dollar expressed the agency's support of the legislation. The agency provided the bill's drafters with many of the credit union-specific provisions included in H.R. 1375. Dollar weighed in with House Financial Services Committee Chairman Mike Oxley (R-Ohio), one of the driving forces behind the bill, in a letter the day before the scheduled House consideration. “ NCUA feels there is much benefit in this legislation for our mission of providing a safe and sound regulatory environment for America's credit unions in a changing and dynamic marketplace,” he wrote. Dollar quoted his own testimony before the committee hearing, stating, “our goal at NCUA as we implement any regulator relief provisions the Congress ultimately chooses to enact will be to take any and all actions with an eye towards removing unnecessary regulatory burden while maintaining, as is proven by the historical strong performance of America's credit unions, our first and foremost priority and commitment to both safety and soundness and necessary regulation to protect the American public.” He added that NCUA stands at the ready as a resource for legislators as the bill makes its way through the legislative process. The trades also put in a good word for the bill with congressional leadership. CUNA is using its membership to get its message across. The trade group has issued a Call to Action requesting its members to call their members of Congress and ask them to support the regulatory relief efforts. CUNA is distributing its Legislative Wrap on regulatory relief, which includes video clips from the bills key sponsors on why it is important to get the bill through Congress. “We hope that this will spur a number of calls. We also hope it will work in educating folks,” CUNA Vice President of Political Affairs Richard Gose said. “I think that, frankly, the indications are that people are putting a lot of emphasis right now into a lot of phone calls, e-mails, and faxes to their congressional offices,” CUNA Senior Vice President for Governmental Affairs John McKechnie explained. “The in-person visits are obviously the best type but our grassroots have a very good track record being effective this way.” For its part, NAFCU delivered a letter last Tuesday to Speaker of the House Dennis Hastert (R-Ill.) encouraging the lawmakers to bring up and pass the bill, which includes more than a dozen provisions for credit unions. “This legislation is of the utmost importance to America's credit unions and their members and I urge you and the House leadership to bring H.R. 1375 to the floor and pass this important legislation this week,” NAFCU President and CEO Fred Becker wrote. The letter also explained that credit unions could formerly lease land on a military base for a nominee fee in return for the in-kind investment to build a branch. Current law does not allow this, but H.R. 1375 would again encourage credit unions to build on Department of Defense installations. The bill would also extend credit unions loan-maturity limit from 12 to 15 years or longer as permitted by NCUA, Becker said. House Minority Leader Nancy Pelosi (D-Calif.), House Majority Leader Tom DeLay (R-Texas), House Majority Whip Roy Blunt (R-Mo.), Oxley, Frank, and Rules Committee Chair David Dreier (R-Calif.). NASCUS President and CEO Mary Martha Fortney urged the regulatory relief cosponsors to “pass this bill speedily so that Congress may complete action this year on these needed reforms.” H.R 1375 is crucial to “reduce the regulatory burden on all depository institutions and help modernize the financial institutions regulatory system,” she wrote in a letter delivered last week. 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