The more than 200-page bill contains eight separate sections, including changes to Dodd-Frank that would mandate tougher capital and oversight standards on banks with more than $50 million in assets. The provisions affecting credit unions are contained primarily in the first section, which contains 25 different measures to provide regulatory relief for credit unions and community banks.

Specifically, the bill would require the NCUA to hold public budget hearings, and to study the impact of RBC2, the agency's latest risk-based capital proposal, on mortgage servicing assets. The bill also mandates statutory relief from annual privacy notice requirements and grants safe harbor qualified-mortgage (QM) status for certain loans held in portfolio.

Additionally, the bill would require the Federal Housing Finance Agency to withdraw its proposed rule revising Federal Home Loan Bank membership requirements while GAO studies the issue, and grant credit unions parity with community banks in the definition of community financial institution under the Federal Home Loan Bank Act.

The NCUA, on the other hand, expressed concern about the bill and plans to work with the Senate Banking Committee to make improvements.

“Chairman Shelby has offered a lot for us to consider, and the NCUA is carefully evaluating the discussion draft's many provisions, especially those affecting credit unions and the agency,” John Fairbanks, Public Affairs Specialist for the agency, said. “We are concerned about potential impact parts of the bill would have on credit unions, such as sharing the cost of the exam ombudsman with the banking industry. The unprecedented NCUA budget language would also single out the agency for differential treatment and lead to inappropriate political pressure in the budget process. The NCUA will continue to work with the Committee to improve the bill.”

Democrats quickly criticized the bill as well. In particular, Ohio Sen. Sherrod Brown, the Senate Banking Committee's top-ranking Democrat, said the bill's broad-brush regulatory relief approach to Dodd-Frank opens the door for big bank relief that could lead to activities like those that helped fuel recent recession. But the larger debate is not something that trickles down to the community financial institution section of the bill, according to Brad Thaler, NAFCU's vice president of legislative affairs.

“We think it's a pretty solid piece of legislation from a credit union perspective and contains a number of regulatory relief provisions we supported,” Thaler said. “We had been working with Sen. Shelby and his staff for a while on the credit union provisions and we're pleased to see a number them included in the bill.”

The Senate Banking Committee is scheduled to hold a mark-up session for the bill on May 21.