Senate action brewing on jobs, reg reform

Feb. 8, 2010 – Senate leaders will be working to advance a jobs bill this week that NAFCU is hoping may serve as a vehicle for an increase in credit unions’ member business loan cap.

Senate Democrats reportedly want to move on approximately $80 billion worth of measures including tax breaks, unemployment benefits, health insurance subsidies for laid-off workers and transportation funds. They want to act before the week-long Presidents Day recess coming up next week.

NAFCU is still working to convince lawmakers of the benefits of including an MBL cap for credit unions in any final jobs package. Brad Thaler, NAFCU's director of legislative affairs, said the fact that lawmakers are trying to keep down the overall price tag would seem to make this a good fit.

“Credit unions want to lend more to small businesses, and small businesses are in need of capital,” said Thaler. “This is a sure way to help stimulate small business activity, and new jobs, without using taxpayer dollars.”

In related news, the House Financial Services and Small Business committees are poised for a joint hearing Thursday on the state of small-business and commercial lending in local markets.

In other developments, Senate Banking Chairman Chris Dodd, D-Conn., said Friday he is having staff draft a financial industry regulatory reform bill for committee consideration later this month despite the current “impasse” between him and the committee’s ranking member, Sen. Richard Shelby, R-Ala.

This impasse is due in part to ongoing disagreement over the proposed Consumer Financial Protection Agency. NAFCU continues to oppose federal credit unions being subject to any CFPA authority.

“Last night, Senator Shelby assured me that he is still committed to finding a consensus on Financial Reform, but for now we have reached an impasse,” Dodd said in a statement Friday. “While I still hope that we will ultimately have a consensus package, it is time to move the process forward.”

“There are two bedrock principles on which I will not compromise: the safety and soundness of the financial system and taxpayer protection against bailouts,” Shelby said. “I fully support enhancing both consumer protection and safety and soundness regulation. I will not support a bill that enhances one at the expense of the other, however. In order to strike the appropriate balance they must be integrated with each other, not separated from each other.”

Shelby said other issues of concern include derivatives regulation and corporate governance.

Dodd said he intends to incorporate in his package those agreements that members on both sides of the aisle have been able to reach so far.

NAFCU is continuing to press for limiting any CFPA to non-federally insured, non-federally regulated service providers and to have the current prudential regulators, including NCUA, retain authority over consumer protections at credit unions, banks and thrifts.