June 16, 2016

Hensarling releases more reform details, includes NCUA Board expansion

House Financial Services Chairman Jeb Hensarling, R-Texas, has released additional details of his broad outline for replacing the Dodd-Frank Act that include expansion of the NCUA Board from three to five members – a move NAFCU has opposed.

That's not all the outline has that would affect credit unions. In addition, it calls for establishment of a Credit Union Advisory Council at NCUA, advances legislation to require annual budget hearings at NCUA and proposes new legislation to require greater transparency on NCUA's overhead transfer rate (OTR).

Hensarling has previously said his draft legislation, dubbed the "Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act," would provide relief to community financial institutions, repeal the Durbin amendment on debit interchange and allow credit unions to appeal exam findings more easily.

NAFCU is strongly in favor of Durbin amendment repeal and other relief for credit unions from Dodd-Frank Act rules that were really intended to stop practices that contributed to the financial crisis. As lawmakers and regulators have pointed out, credit unions did not participate in those.

The proposal for a five-member NCUA Board was included in the additional plan details circulated Wednesday. The outline also lists removal of the CFPB director and the Treasury representative from the five-member FDIC Board, leaving FDIC with five independent board members. The outline was silent on any additional restrictions of the expanded NCUA Board.

In addition, the director position at CFPB would be replaced by a bipartisan, five-member commission.

NAFCU opposes adding new positions to the NCUA Board, particularly for its potential impact on the agency's budget and the fees credit unions pay to fund that budget through operating fee assessments.

The association continues to review plan details for their potential impact on credit unions.