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NAFCU President and CEO Dan Berger noted the association's support for the draft language of the Financial CHOICE Act, including its elimination of the Durbin interchange price cap, in a letter yesterday to leaders of the House Financial Services Committee ahead of today's hearing on the subject.

"Many elements of the discussion draft will help create an environment that will allow credit unions to succeed," Berger wrote to the draft's author and House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and committee Ranking Member Maxine Waters, D-Calif. "Changes to mortgage rules; changes to HMDA limits; and examining appropriate risk capital levels are key parts of the bill."

Berger specifically pointed to the elimination of the Durbin amendment in the draft language, counting it "among the most significant aspects of this discussion draft for credit unions," and he urged that it remain intact throughout the legislative process. NAFCU also signed onto a joint letter Tuesday with the Electronic Payments Coalition – of which NAFCU is a member – in support of repealing the Durbin amendment.

He wrote that NAFCU supports a commission structure for the CFPB. Berger added that NAFCU was the only financial services trade association to oppose the CFPB having authority over credit unions. He noted that since the second quarter of 2010, the industry has lost 1,660 federally-insured credit unions – more than 22 percent of the industry.

Berger also detailed in his letter what a positive regulatory environment for credit unions would look like, with a reduction of the overall regulatory burden playing a key part.

Discussing the draft language, Berger urged the committee to go further in the final bill by adding provisions that would give credit unions relief from the arbitrary member business lending cap and provide the industry with greater clarity on its ability to add underserved areas to their fields of membership. "The Committee could improve the capital 'off-ramp' provision for credit unions by adding language that recognizes their unique nature and limited ability to raise capital, which disadvantages them in returning to the 10% threshold envisioned in the bill," Berger added.

Other aspects of the draft supported by NAFCU, Berger noted, include:

• retention of the three-member structure of the NCUA Board (though he said it's unnecessary to bring the agency under the congressional appropriations process as the draft proposes);
• the transparency and independent oversight it brings to the NCUA in the form of budget hearings, an independent appeals process and more transparency regarding the overhead transfer rate;
• the elimination of the CFPB's supervisory authority with respect to unfair, deceptive or abusive acts and practices (Berger also urged expanding the CFPB's exemption authority under Section 1022 of the Dodd-Frank Act for credit unions); and
• the assurance of a cost-benefit analysis for regulations to be reviewed by Congress.

Berger concluded by asking that the committee also level the playing field between regulated financial institutions and non-regulated entities. "We also would hope that the discussion draft could be further clarified to ensure that there is a federal regulatory structure, whether the new CFPB/Consumer Law Enforcement Agency or not, for non-bank financial services market players that do not have a prudential regulator," he wrote.