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 Trumpinto law.
Immediately following the bill’s passage in Congress, NAFCU President and CEO Dan Bergerthanking 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. A detailed analysis of the provisions in S. 2155 that are most relevant to credit unions can be found .
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,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,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 a hot topic in the 114th Congress. NAFCU testified before theand 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 .
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 spring 2019 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 would remove mandatory underwriting requirements, including ability-to-repay (ATR) provisions, and the other delays 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 assess the TILA/RESPA integrated disclosure (TRID) rule.
- National Credit Union Administration (NCUA): In February 2019, the NCUA, together with several other federal agencies, issued a 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. In June 2019, the agency proposed to delay the risk-based capital rule for an additional two years, to January 1, 2022. In July 2019, the NCUA finalized a rule that increases the threshold at which appraisals are required for nonresidential real estate transactions. Other items on the NCUA's rulemaking agenda are issues the agency is already pursuing, including PALs, 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.