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

In May 2014 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:

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.

NAFCU's Five-Point Plan for Regulatory Relief 


Download NAFCU's Five-Point Plan for Regulatory Relief

Administrative Improvements to the National Credit Union Administration (NCUA)

  • Allow a federal credit union to petition NCUA for a waiver in favor of a state rule.
  • Provide NCUA the authority to delay implementation of CFPB rules that affect credit unions and to tailor those rules for credit unions' unique structure.
  • Require a cost/benefit analysis of all rules that includes a three-year look back and reevaluation of rules that cost 20 percent or more than their original cost estimate.
  • Enact new examination fairness provisions to help ensure timeliness, clear guidance and an independent appeal process free of examiner retaliation.
  • Improve the Central Liquidity Facility by removing the subscription requirement for membership and permanently removing the borrowing cap.

Capital Reforms

  • Direct NCUA to, along with industry representatives, conduct a study on prompt corrective action, and recommend changes.
  • Modernize capital standards to allow supplemental capital; and direct the NCUA Board to design a risk-based capital regime for credit unions that takes into account material risks.
  • Establish special capital requirements for newly chartered federal credit unions that recognize the unique nature and challenges of starting a new credit union.

Structural Improvements

  • Direct NCUA, with input from the industry, to conduct a study of outdated corporate governance provisions in the Federal Credit Union Act and make recommended changes to Congress.
  • Improve the process for expanding a federal credit union's field of membership by allowing voluntary mergers among multiple common bond credit unions, easing the community charter conversion process and making it easier to include those designated as "underserved" within a credit union's field of membership.

Operational Improvements

  • Raise the arbitrary cap on member business loans to 27.5 percent or raise the exemption on MBL loans from $50,000 to $250,000, adjusted for inflation, and exempt loans made to non-profit religious organizations, businesses with fewer than 20 employees and businesses in "underserved areas."
  • Remove requirements to mail redundant and unnecessary privacy notices on an annual basis, if the policy has not changed and new sharing has not begun since the last distribution of the notice.
  • Allow credit unions greater authority and flexibility in how they invest.
  • Provide NCUA the authority to establish longer maturities for certain credit union loans and greater flexibility in responding to market conditions.
  • Provide federal share insurance coverage for Interest on Lawyers Trust Accounts (IOLTAs). (H.R. 3468- the bill was signed into law on December 18, 2014.)

Data Security Reforms

  • Establish national standards for safekeeping of all financial information.  
  • Establish enforcement standards for data security that prohibit merchants from retaining financial data, and require merchants to disclose their data security policies to customers.
  • Hold merchants accountable for the costs of a data breach, especially when it was due to their own negligence; shift the burden of proof in data breach cases to the party that incurred a breach; and require timely disclosures in the event of a breach.

Recent Media Outreach

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

Credit unions seek 'regulatory relief' from new Congress (The Hill, January 6, 2015) 

2014: Year of 'Enough Is Enough' (Credit Union Journal, December 19, 2014) 

NAFCU Hails President Obama’s Signing Into Law IOLTA Parity for Credit Unions (December 18, 2014)      

Credit unions ask Congress to ease regs (The Hill, November 12, 2014)

Lawmakers, Regulators Spar Over Regulatory Relief (Credit Union Journal, September 17, 2014)

Credit unions to Senate Banking: Enough is enough (HousingWire, September 16, 2014)

House Committee Gives CUs Some Potential Regulatory Relief (Credit Union Journal, July 30, 2014)

House panel seeks to SCRUB onerous regs (The Hill, June 18, 2014)

NAFCU members see regulatory costs spiking (HousingWire, May 14, 2014)

CFPB's QM Reg Relief Not Enough: Mortgage Execs (Credit Union Times, May 7, 2014)

Trio Of Credit Union Reg Relief Bills Passes House (Credit Union Journal, May 7, 2014)

Trades Rebuff NCUA Reg Relief Claims (Credit Union Times, April 8, 2014)

Recent Policy Letters

Read recent letters from NAFCU to members of Congress on the important issue of regulatory relief for 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 January 2015