August 24, 2014

IOLTA, QM relief and more in Senate bills

Aug. 1, 2014 – New regulatory relief measures offered in the Senate this week address Interest on Lawyers Trust Accounts, qualified-mortgage relief and an increase from $10 billion to $50 billion in the asset-size threshold for institutions subject to direct CFPB oversight.

Sens. Mark Warner, D-Va., and Angus King, I-Maine, unveiled S. 2698 Wednesday night. The bill, "Regulatory Easement for Lending Institutions that Enable a Vibrant Economy (RELIEVE) Act," would provide federal deposit and share insurance parity for credit unions with regard to IOLTAs and other escrow accounts. The bill also improves the definition of "rural" so CFPB will recognize more counties as rural, and it increases the annual mortgage origination limit for rural creditors receiving QM relief from 500 to 1,000 per year.

NAFCU sent a letter to Warner, King and Sens. Deb Fischer, R-Neb., and Jon Tester, D-Mont., on Thursday thanking them for introducing the bill. "We appreciate the RELIEVE Act clarifying that the NCUA has the authority to provide NCUSIF [National Credit Union Share Insurance Fund] coverage for IOLTAs and other similar escrow accounts," NAFCU Vice President of Legislative Affairs Brad Thaler wrote. He also wrote in support of the bill increasing the annual mortgage origination limit for rural creditors.

The Senators also introduced stand-alone legislation, S.2699, addressing just IOLTAs as well as a stand-alone S.2697, which addresses the qualified mortgage relief aspects of the RELIEVE Act. The House in May passed H.R. 3468, which would ensure credit unions have parity with FDIC-insured institutions when it comes to escrow accounts, such as IOLTAs.

On Thursday, Sens. Joe Donnelly, D-Ind., and Pat Toomey, R-Pa., dropped legislation, S. 2732, to raise the $10 billion CFPB oversight threshold to $50 billion. NAFCU was the only financial trade association to oppose credit unions at any asset size being under the jurisdiction of CFPB. NAFCU supports this measure as a step in the right direction.

NAFCU will keep members informed of any actions taken on these bills.