Regulatory Relief

Credit unions did not contribute to the financial crisis yet are still subject to increasing regulatory requirements mandated under the Dodd-Frank Act.  Accordingly, broad-based regulatory relief continues to be a top priority for NAFCU and its member credit unions. In addition to NAFCU's five-point plan for regulatory relief, NAFCU called on Congressional leaders to embrace bipartisan regulatory relief in a letter outlining top priorities for the 114th Congress, including:

  • Preservation of the Credit Union Tax Exemption
  • Capital Reform /Risk-based Capital
  • Data/Cyber Security
  • Housing Finance Reform
  • Member Business Lending
  • Patent Reform

Recent Activity on Capitol Hill

Regulatory relief for community based financial institutions has been a hot topic in the 114th Congress. NAFCU has already testified before the House Financial Services and Senate Banking Committees on regulatory relief priorities for credit unions including the impact of NCUA's second risk-based capital proposal, field of membership changes, and a plethora of other issues outlined in NAFCU's 5 Point Plan for Regulatory Relief.  The Financial Services Committee moved a package of bills, several of which positively impacted credit unions, and we expect the Senate will follow suit with their early ideas in April.

Last Congress, the House considered and passed by voice vote a standalone measure (H.R. 3468) that amends the Federal Credit Union Act to require that pass-through share insurance coverage be provided when a credit union member holds funds on behalf of a nonmember in trust accounts, such as Interest on Lawyers Trust Accounts (IOLTAs). On December 11, 2014, the Senate passed the House bill by unanimous consent, and on December 18, 2014 the bill was signed by the President. NCUA Chairman Debbie Matz announced on December 19, 2014 that lawyers' trust accounts at federally insured credit unions are now insured to the limit allowed by the National Credit Union Share Insurance Fund. NAFCU had urged an NCUA response immediately after President Obama signed the bill into law. NAFCU believes this bipartisan measure passed at the end of the 113th Congress is a good first step and will lead to larger regulatory relief in the 114th Congress.

NAFCU has testified before Congress on regulatory relief numerous times and looks forward to future opportunities before key lawmakers.  Recent regulatory relief testimony includes:

Peggy Bosma-LaMascus, President and CEO of Patriot FCU before the House Financial Services Committee, "Preserving Consumer Choice and Financial Independence." 3/18/2015

Ed Templeton, President and CEO of SRP FCU before the Senate Banking Committee, "Regulatory Relief for Community Banks and Credit Unions." 2/12/2015

Linda McFadden, President and CEO of XCEL FCU before the Senate Banking Committee, "Examining the State of Small Depository Institutions." 9/16/2014

David Clendaniel, President and CEO of Dover FCU before the House Financial Services Committee, "Examining Regulatory Relief Proposals for Community Financial Institutions" 7/15/2014

Daniel Weickenand, President and CEO of Orion FCU before the House Financial Services Committee, "How Prospective and Current Homeowners Will Be Harmed by the CFPB's Qualified Mortgage Rule" 1/14/2014

Robert Burrow, President and CEO of Bay Heritage FCU before the House Financial Services Committee, "Examining Credit Union Regulatory Burdens"4/10/2013

NAFCU's Position on Regulatory Relief

Please be assured that NAFCU will continue to push for commonsense regulatory reform on Capitol Hill with an emphasis on the five areas outlined in our plan below and available for download.

NAFCU's Five-Point Plan for Regulatory Relief - Revised February 2015

1. Capital Reforms for Credit Unions

Modernize capital standards for credit unions in order to reflect the realities of the 21st century financial marketplace:

  • Authorize a true risk-based capital system for credit unions that more accurately reflects a credit union's risk profile.
  • Give the National Credit Union Administration (NCUA) authority to allow supplemental capital accounts for credit unions that meet certain standards.
  • Authorize the NCUA to further establish special capital requirements for newly chartered federal credit unions that recognize the unique nature and challenges of starting a new credit union. (Given that very few new credit unions have been chartered over the past decade, and in order to encourage the chartering of new credit unions.)

2. Field of Membership Improvements for Credit Unions

Make improvements to the Federal Credit Union Act to help enhance the federal credit union charter:

  • Improve the field of membership (FOM) restrictions that credit unions face, including expanding the criteria for defining "urban" and "rural."
  • Allow voluntary mergers involving multiple common bond credit unions.
  • Allow credit unions that convert to community charters to retain their current select employee groups (SEGs).
  • Allow all credit unions, regardless of charter type, to add underserved areas to their field of membership.
  • Authorize the NCUA to grant parity to a federal credit union on a broader state rule, if such a shift would allow them to better serve their members and continue to protect the National Credit Union Share Insurance Fund.

3. Reduce Consumer Financial Protection Bureau (CFPB) Burdens on Credit Unions

Credit unions did not cause the financial crisis, but have been victims in the new tide of regulations aimed at those institutions who did, with over 1,000 institutions disappearing since the passage of the Dodd-Frank Act, primarily due to the new regulatory burdens.

  • Exempt all credit unions from CFPB rulemaking and examination authority, since NCUA once again has been given authority to write all rules for credit unions, tailoring new proposals to meet the special nature of the credit union industry.
  • Authorize the NCUA to delay the implementation of a CFPB rule that applies to credit unions, if complying with the proposed timeline would create an undue hardship.
  • Authorize the NCUA to modify a CFPB rule for credit unions, provided that the objectives of the CFPB rule continue to be met.
  • Require the NCUA and the CFPB to conduct a look-back cost-benefit analysis on all new rules after three years. The regulators should be required to revisit and modify any rules for which the cost of complying was underestimated by 20% or more from the original estimate at the time of issuance.

4. Operational Improvements for Credit Unions

Credit unions stand willing and ready to assist in our nation's economic recovery. Our industry's ability to do so, however, is severely inhibited by antiquated legislative restrictions.

  • Modify the arbitrary and outdated credit union member business lending (MBL) cap to help create American jobs. This can be done by raising the current 12.25% limit to 27.5% for credit unions that meet certain criteria or by raising the outdated "definition" of a MBL from last century's $50,000 to a new 21st century standard of $250,000, with indexing for inflation to prevent future erosion. MBLs made to veterans, non-profit religious organizations, businesses in "underserved areas," or small businesses with fewer than 20 employees should be given special exemptions for the arbitrary cap.
  • Eliminate statutory requirements to mail redundant and unnecessary privacy notices on an annual basis, provided that the credit union's policy has not changed and additional sharing of information with outside entities has not been undertaken since the distribution of the previous notice.
  • Give the NCUA greater flexibility in how it handles credit union lending, such as the ability to establish longer maturities for certain loans.
  • Enact new examination fairness provisions to help ensure timeliness, clear guidance and an independent appeal process free of examiner retaliation.

5. 21st Century Data Security Standards

Credit unions are being adversely impacted by ongoing cyber-attacks against the United States and continued data breaches at numerous merchants. The cost of dealing with these issues hinders the ability of credit unions to serve their members. Congress needs to enact new 21st century data security standards that include:

  • Paying costs associated with a data breach by those entities that were breached.
  • Establishing national standards for the safekeeping of all financial information.
  • Requiring merchants to disclose their data security policies to their customers.
  • Requiring the timely disclosure of entities that have suffered a data breach.
  • Establishing enforcement standards for provisions prohibiting merchants from retaining financial data.
  • Requiring the timely notification of the account servicer if an account has been compromised by a data breach.
  • Requiring breached entities to prove a "lack-of-fault" if they have suffered from a data breach.

Recent Media Outreach

NAFCU has stayed at the forefront of this issue and continued to champion credit unions in major media nationwide.

Senate Banking Committee Approves Reg Relief Measure (Credit Union Times, May 21, 2015)

Senate Banking Committee Approves Reg Relief Bill (, May 21, 2015)

Senate Committee Passes Regulatory Reform Bill on Party Lines (National Mortgage Professional Magazine, May 21, 2015)

NAFCU Statement on Senate Banking Committee Approval of Chairman Shelby’s Regulatory Relief Bill (May 21, 2015)  

Banks, Credit Unions Join Forces to Push for Reg Relief (American Banker, May 15, 2015)

Shelby Bill Receives Praise From Trades (Credit Union Times, May 13, 2015)

NAFCU Statement In Response to Sen. Shelby’s Introduction of Regulatory Relief Legislation (May 12, 2015) 

Credit Union Reg Relief Set For House Vote (Credit Union Times, April 8, 2015)

NAFCU Expresses Support For Bill Calling For Reg Reviews (, March 29, 2015)

Credit Union Reg Relief Bills Approved (Credit Union Times, March 26, 2015)

Reg Relief Bills Marked Up (Credit Union Times, March 25, 2015)

House marking up key mortgage, regulatory reform bills (HousingWire, March 25, 2015)

House Committee Considers Reg Relief Bills (Credit Union Times, March 23, 2015)

Mortgage lenders want regulatory relief (HousingWire, March 18, 2015)

'Time is of the Essence' to Save Small Institutions, Lawmakers Warn (Credit Union Journal, March 18, 2015) 

NAFCU to House Financial Services: Regulatory Burden is Top Challenge Facing Credit Unions (March 18, 2015)

NAFCU Voices Support for Proposed Legislation (The MReport, March 13, 2015)

Top 10 Regulations That Need Attention Now (Credit Union Times, March 8, 2015)

Regulatory Relief Bill Introduced (Credit Union Times, March 5, 2015)

Recent Policy Letters

Read recent letters from NAFCU to members of Congress on the important issue of regulatory relief for credit unions.

4-22-2015 NAFCU Letter on Regulatory Burdens Faced by Credit Unions

12-12-2014 NAFCU Letter to the President Urging Support for the Credit Union Share Insurance Fund Parity Act (H.R. 3468)

10-22-2014 NAFCU Letter to Senator Crapo on Regulatory Relief for Credit Unions

9-26-2014 NAFCU Letter to the Senate on Regulatory Relief for Credit Unions

9-8-2014 NAFCU Letter to the Senate Banking Committee on the Importance of Regulatory Relief for our Nationals Credit Unions

7-28-14 NAFCU Letter to the HFSC on Regulatory Relief Measures for Credit Unions

7-15-14 Testimony from David Clendaniel from the House Financial Services Committee on Financial Institutions and Consumer Credit

5-6-14 NAFCU's Letter in Support for Credit Union Regulatory Relief Measures

5-5-14 NAFCU's Letter in Support of Insurance Parity on IOLTAs (H.R. 3468)

5-5-14 NAFCU's Letter in Support of Changes to the CFPBs Rural Designation Process (H.R. 2672)

View all NAFCU Policy Letters

Updated April 2015