June 13, 2017

Treasury Secretary Mnuchin reiterates support for relief for credit unions

In testimony yesterday before the Senate Budget Committee, Treasury Secretary Steven Mnuchin said his number one priority is creating sustainable growth for all Americans, and that includes regulatory relief for America's credit unions.

In questioning from Sen. Mike Crapo, R-Idaho, Mnuchin said one of the administration's goals is to ease some of the burdens that have been placed on credit unions and small community banks.

A Treasury report issued Monday contains a number of NAFCU-requested relief measures for credit unions, including:

  • revising the risk-based capital requirements to only apply to credit unions with total assets in excess of $10 billion or eliminating altogether RBC requirements for credit unions satisfying a 10 percent simple leverage (net worth) test and allowing credit unions subject to RBC requirements to have access to supplemental capital;
  • ensuring an extended examination cycle of at least 18 months, and extending that relief to institutions above $1 billion in assets;
  • having the CFPB provide rulemaking or guidance on UDAAP;
  • reforming the governance of the CFPB, including the possibility of changing the sole director to a bipartisan commission; and
  • better tailoring of regulations and raising thresholds of their application, including regulations on qualified mortgages.

In questioning yesterday, Mnuchin said that while the Treasury's tax reform proposal will likely zero out most deductions, it will preserve the home mortgage and charitable deductions.

Crapo, who chairs the Senate Banking Committee, said at an industry event yesterday that he will use the Treasury Department's recommendations to craft a bill to bolster economic growth and provide relief to financial institutions.

Crapo specifically noted Treasury's recommendations to raise the $50 billion "systemically important financial institution" (SIFI) threshold under the Dodd-Frank Act and to change the CFPB's structure and authority. He also mentioned possibly tackling government-sponsored enterprise reform this year.