April 12, 2017

Hensarling redrafts Dodd-Frank reforms, keeps Durbin repeal

Snapshot of a document summarizing the changes from the Financial CHOICE Act of the last Congress.

A draft revised Financial CHOICE Act circulated by House Financial Services Committee Chairman Jeb Hensarling, R-Texas, to committee members Tuesday would repeal the Durbin interchange amendment and implement other reforms of the Dodd-Frank Act that NAFCU has been seeking for credit unions.

The draft, which Hensarling detailed earlier this week in a call he made to NAFCU President and CEO Dan Berger, is expected to be introduced before month end. (See summary.)

Berger welcomed changes in the draft that would leave NCUA's board structure intact, repeal the Durbin amendment and rein in several of the CFPB's authorities and practices of most concern to credit unions, including its authority to address unfair, deceptive or abusive acts and practices (UDAAP). But he reminded that this package is just a starting point for discussion.

"NAFCU would support a number of the provisions in this revised CHOICE Act draft, but we know this package could see numerous changes as it moves through the legislative process," said Berger. "This is a welcome beginning, and we appreciate Chairman Hensarling's ongoing leadership in pushing forward on Dodd-Frank Act reform. We also look forward to working with the chairman, the committee members and Congress toward passage of a measure that will bring real regulatory relief to the nation's credit unions."

President Donald Trump on Tuesday also reiterated his plan to advance regulatory reforms this year.

Hensarling's revised CHOICE Act draft differs in several respects from the package he introduced, and the committee approved, last Congress. Key provisions of concern to credit unions would:

  • preserve the NCUA Board's current three-member structure (last year, a five-member board was contemplated);
  • retain a single director for the leadership structure of the CFPB (which would be renamed the Consumer Financial Opportunity Agency), making that position subject to removal by the president at will;
  • eliminate the CFPB's supervisory authorities, leaving it with enforcement authority only with respect to enumerated consumer protection laws;
  • eliminate any CFPB authority with respect to UDAAP;
  • end the CFPB's publication of its consumer complaint database.

Because the NCUA has already expanded exam cycles to to 18 months for well-run credit unions under $1 billion in assets, a change NAFCU supports (and would like to see applied to all well-run credit unions), Hensarling has removed a corresponding mandate from his draft CHOICE Act. The draft also would make Dodd-Frank Act-mandated offices within the CFPB and mandated advisory councils optional, at the director's discretion.

Congress is in recess, with House members in their home districts until April 24 and senators in their home states until April 23. NAFCU is encouraging credit unions to use this opportunity for in-person contacts with lawmakers on key issues, including Durbin amendment repeal and regulatory relief such as that envisioned in the draft CHOICE Act. To contact lawmakers by email, visit NAFCU's Grassroots Action Center.