Regulatory Relief

Recent Activity

NAFCU President and CEO, B. Dan Berger discusses how the newly passed Dodd-Frank rollback bill will help businesses. (Fox Business News)

After years of NAFCU advocacy and credit union grassroots efforts, Congress passed the NAFCU-backed Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) on May 22, 2018. Two days later, President Trump signed the bill into law.

Immediately following the bill’s passage in Congress, NAFCU President and CEO Dan Berger sent a letter thanking President Trump for his leadership on helping Main Street financial institutions, and urging him to sign the bill. In addition, Berger personally contacted White House staff again to thank them for their dedication to regulatory relief efforts and for working with NAFCU.

S. 2155 includes various credit union regulatory relief measures related to member business lending and the Home Mortgage Disclosure Act. More details on the NAFCU-supported provisions of the bill can be found here. A detailed analysis of the provisions in S. 2155 that are most relevant to credit unions can be found here.

Testimony

In the 115th Congress, NAFCU members testified before various Congressional committees on behalf of the association to educate lawmakers on the pressing need to provide regulatory relief to the nation's credit unions. 

On June 8, 2017, Steve Grooms, President/CEO at 1st Liberty Federal Credit Union, testified before the Senate Banking Committee at a hearing entitled “Fostering Economic Growth: The Role of Financial Institutions in Local Communities.” Grooms outlined how Dodd-Frank regulations have harmed his credit union and the industry as a whole and called on Congress to clarify the CFPB's ability to exempt credit unions from certain rules.  

On March 21, 2017, Keith Stone, President/CEO at The Finest Federal Credit Union, testified before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit calling for a reduction of regulatory obstacles that burden credit unions both during the initial chartering stage as well as when new product lines are introduced.

Regulatory relief for community-based financial institutions was also hot topic in the 114th Congress. NAFCU testified before the House Financial Services and Senate Banking Committees on regulatory relief priorities for credit unions, including the impact of the NCUA's second risk-based capital proposal, field of membership changes, and many other issues. View more congressional testimony from NAFCU member credit unions on regulatory relief here.

Agency Rulemakings and Actions

While regulatory relief is unlikely to be a focus in the 116th Congress, the Trump administration and federal agencies have indicated that regulatory relief is still a priority for them. Some of the promising steps taken by relevant agencies recently or indicated in the fall 2018 agenda for regulatory and deregulatory actions are outlined below:

  • Bureau of Consumer Financial Protection (CFPB): In February 2019, the CFPB issued two proposals to address concerns with its 2017 payday lending rule. One proposal would remove mandatory underwriting requirements, including ability-to-repay (ATR) provisions, and the other proposal would delay the compliance date by 15 months to November 19, 2020. NAFCU is supportive of the delay, and has recommended the CFPB provide a safe harbor to all credit union payday alternative loan (PAL) products. In May 2019, the CFPB issued a proposed rule to adjust collection and reporting thresholds under the Home Mortgage Disclosure Act (HMDA), as well as an advance notice of proposed rulemaking to gather information on the costs and benefits of reporting certain data points under HDMA. In addition, the CFPB plans to issue a rule related to debt collection practices, and it will also assess the TILA/RESPA integrated disclosure (TRID) rule. NAFCU maintains that credit unions should not be the target of future debt collection rules.
  • National Credit Union Administration (NCUA): In February 2019, the NCUA, together with several other federal agencies, issued a final rule to implement the private flood insurance provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 and provide relief to credit unions from some of its requirements. Other items on the NCUA's fall rule agenda are issues the agency is already pursuing, including PALs, real estate appraisals, and Federal Credit Union Bylaws. NAFCU has long supported efforts to modernize bylaws and provide credit unions with flexibility under PALs. The agency is also expected to issue a proposed rule on alternative capital in the coming months.