WASHINGTON — Federal credit unions would be allowed to apply to serve underserved areas and loans in those communities and to religious non-profit institutions would not count against their member business loan cap, as a result of a compromise regulatory reform bill introduced last night in the House.
The Credit Union Bank and Thrift Regulatory Relief Act (H.R. 6318) also grandfathers in existing designations of underserved areas and allows financial institutions to pay interest on business checking accounts. The measure does not raise the overall MBL cap, which is 12.5% of a credit union's total assets. The bill is a compromise between credit unions and banks, the latter group helped scuttle passage of the Credit Union Regulatory Relief Act earlier this year. It could come up for a vote as early as next week.
The measure is introduced by House Financial Services Committee Chairman Barney Frank (D-Mass.) and Rep. Paul Kanjorski, (D-Pa.), and Ed Royce (R-Calif.) the main sponsors of legislation providing regulatory relief for credit unions as well as Rep. Dennis Moore (D-Kan.), a key backer of regulatory relief for banks.
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The bill's fate in the Senate is less clear.
"There is a long road ahead there because the Senate is not as far along on regulatory relief as the House," said Brad Thaler NAFCU Director of Legislative Affairs.
CUNA Vice President of Legislative Affairs Ryan Donovan said "we'll make our case there that this is a bill backed by banks and credit unions. But the reality is they are dealing with a lot of issues in a short window."
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