The regulatory overhaul plan proposed by House Financial Services Chairman Jeb Hensarling (R-Texas) favors banks and does not give enough regulatory relief to credit unions, CUNA President/CEO Jim Nussle said in a letter to the chairman on Friday.
"We appreciate your efforts to propose meaningful regulatory reform for credit unions, and we encourage to go even further toward the goal of reducing regulatory burden so that credit unions can more fully serve their members," Nussle said in the letter, which expands upon his testimony on one section of the plan before the committee last week.
At the time, Nussle promised a broader reaction to the proposal.
Hensarling's plan includes repealing much of Dodd-Frank, reining in the CFPB and expanding the NCUA board to five members.
That's not enough, according to Nussle.
"As a general observation, we note that the legislation as a whole appears to provide considerably more regulatory relief to banks, particularly the largest banks, than it does to credit unions," he wrote. "We believe much more should be done through this or similar legislation to modernize the federal credit union charter with a goal of reducing credit unions' regulatory burden and expanding consumer and small business access to credit unions."
"In a bill that makes so many changes to the way banks are regulated, surely there is space to tackle major improvements to the credit union charter," Nussle continued.
Nussle endorsed many provisions of Hensarling's plan, including the proposal to expand the NCUA board to five members.
The small size of the NCUA board means that there are times when there are only one or two members, Nussle said. He added that even when there are three members, NCUA board members regularly have cited open meetings requirements in refusing to meet with each other. Any meeting that has a quorum of two members is subject to open meetings laws.
As it expands the NCUA board, Congress should also remove the limitation that no more than one member of the NCUA board have credit union experience, CUNA said.
The NCUA should not be subject to the annual appropriations process, since the funds that pay for NCUA operations comes from credit unions, Nussle said, adding that including the NCUA in the appropriations process could affect the independence of the credit union system.
However, CUNA does support subjecting the CFPB to the annual appropriations process.
CUNA also opposes provisions that would allow federal savings and loan associations to operate with the duties and responsibilities of national banks unless credit unions are given the same privilege.
"Our opposition is a matter of fairness and frankly in the interest of good and consistent public policy," Nussle said.
CUNA also opposes the continuation of the member business loan cap, which Nussle said is an insult to small businesses seeking access to credit from credit unions.
Continuing to subject credit unions to the member business lending cap ignores credit unions' history of serving this market and insults small businesses seeking access to credit from credit unions otherwise willing and able to lend to them.
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