WASHINGTON — A legislative move to offer regulatory relief to banks with less meat for credit unions drew frenetic credit union lobbying and then opposition before it was finally withdrawn this week.
Republican Senator Mike Crapo of Idaho authored the amendment which would, among other things, make more community banks eligible for an 18-month exam schedule, increase small business loans for thrifts, remove limitations on investments in auto loans, and repeal the prohibition on banks offering interest on business checking.
"The things that this amendment had were huge for banks but there was nothing really in it for credit unions" complained one credit union lobbyist who declined to be named.
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The lobbyist expressed a degree of perplexity and frustration about the amendment after credit unions had been working hard with Crapo and other senators on regulatory relief.
Crapo filed the legislative attempt as an amendment to a bill that would have addressed the issue of industrial loan companies, itself a controversial piece of legislation.
Credit union lobbyists reached out to senators to try to get more of what credit unions have been seeking–such as addressing the credit union member business-lending ceiling or modification of the credit union Prompt Corrective Action system to a risk-based approach.
But in the end, when they couldn't cut any deals, CUNA and NAFCU cooperated in sending a letter to Senator Christopher Dodd (D-Conn.) Chairman of the Banking, Housing and Urban Affairs Committee, opposing the amendment altogether.
"While we recognize the intent of Crapo amendment No. 4 to the ILC bill, we do not support it as submitted because we believe it is unbalanced by including provisions which would increase the business lending limits and auto lending investment limits for thrift institutions while providing no parallel increase in credit union business lending caps or modification of the credit union Prompt Corrective Action system to a risk-based approach," the associations wrote in their Feb. 12 letter.
"We continue to view it as inappropriate for Congress to consider a substantial expansion in thrift business lending, and a significant enhancement of the thrift charter, in the absence of similar substantial relief for America's credit unions," they added.
In the end, CUNA reported that Crapo's office had said the senator decided to withdraw the amendment, but the office as of press time had not been able to confirm this.
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