Newsroom

October 22, 2014

NAFCU supports Crapo's call for targeted reform

NAFCU Vice President of Legislative Affairs Brad Thaler wrote Senate Banking Committee Ranking Member Mike Crapo, R-Idaho, in support of the senator's views published in American Banker advocating targeted reforms to help small financial institutions.

"NAFCU appreciates your work in highlighting the difficult regulatory environment credit unions face and could not agree more that a package of targeted and meaningful reforms could go a long way toward ensuring that credit unions can continue to thrive and serve their 98 million members," Thaler wrote.

In his opinion piece, Crapo wrote, "We have lost more than 3,000 small banks and more than one-half of credit unions since 1990. In fact, 85% of banks with less than $100 million in assets disappeared between 1985 and 2013. The vast majority of those small banks did not fail. On the contrary: the rates of failure, voluntary closure and overall attrition were lower for these institutions than any other size group, according to a recent report from the Federal Deposit Insurance Corp. Not only is the nation losing small banks, our regulatory framework is discouraging the creation of new ones."

Thaler touted NAFCU's five-point plan for regulatory relief for credit unions. He emphasized the need to provide credit unions relief with respect to Interest on Lawyers Trust Accounts and to alter the definition of points and fees under CFPB's "qualified mortgage" rule. Thaler said these are "two key areas where the House has passed legislation with overwhelming bipartisan support this Congress but the Senate has yet to act."

Crapo also sent out letters to the heads of the Securities and Exchange Commission, the Commodity Futures Trading Commission and CFPB urging them to plan a review of outdated regulations.

Also on Wednesday, CFPB finalized an adjustment to its mortgage rules that allows for limited circumstances in which lenders that exceed the points and fees cap can pay a refund of the excess amount, plus interest, to consumers, which will allow the loan to still be considered a qualified mortgage.

Earlier this week, Crapo and committee Chairman Tim Johnson, D-S.D., asked Treasury Secretary Jack Lew, NCUA Board Chairman Debbie Matz and banking regulators how they are addressing cybersecurity issues affecting the financial system – another key issue NAFCU has strongly pushed for government action on.