by Ryan Donovan, CUNA Chief Advocacy Officer It could be the last week of
session for Congress before the election (but it probably won't be)... the
Financial CHOICE Act will be marked-up in the House Financial Services
Committee... the bankers are suing NCUA again... and a grassroots effort has
been initiated on the CFPB payday and small dollar lending proposal.
Small Banks Sue NCUA
Over MBL Rule: The Independent Community Bankers
of America (ICBA) filed a lawsuit on Wednesday against the NCUA
over its revised member business lending (MBL) rule that was finalized in
February. The lawsuit, ICBA v. NCUA, was filed in the U.S. District
Court of the Eastern District of Virginia.
ICBA's main contention is that
NCUA violated the MBL restriction in the Federal Credit
Union Act (FCUA) by allowing all credit unions to exceed the statutory 1.75
times actual net worth limitations on MBLs. ICBA contends that NCUA
did this by allowing credit unions to exclude nonmember loan
participations from aggregate MBL calculations.
We are confident that the 2016 MBL rule is
consistent with the law, which still includes significant constraints
on credit union member business lending. We also believe NCUA acted
appropriately and followed all procedures when issuing the MBL rule, and
the rule falls well within NCUA's statutory authority to interpret
the application of the MBL cap. We are exploring legal options to
support the new MBL regulation and will continue to advocate for credit union
regulatory relief. [Read More]
Action Alert:
CFPB's Small Dollar Loan Proposal: The Consumer Financial Protection
Bureau's (CFPB) released an extremely complex over 1300-page small dollar
rule in early June. The proposed rule includes some reforms to predatory
lending practices, which credit unions would support if narrowly tailored.
Unfortunately, the CFPB's proposed rule badly misses the mark of targeting
predatory behavior, and instead threatens to limit consumer-friendly alternatives
to short-term, small dollar loans. Share your story with the CFPB and tell them the
negative impact this rule will have on your ability to provide services to
your members.
Early exit? As we mentioned in last week's update, the Congressional
calendar released by House and Senate leadership late last year projected the
House would be in session until September 30 and the Senate until October 7.
But 2016 being what it is, Congressional leaders (and certainly some anxious
back benchers) are eager to wrap up work here so they can go home and
campaign. From a strategic perspective, the chess pieces have been moving
into place for some time. Unlike the past few years, there is no debt ceiling
to worry about, and there is little to be gained by either party (or a subset
thereof) to hold up government funding to score political points. Two
priorities remain: funding the government past September 30, and providing
some form of supplemental appropriations to address the Zika epidemic. If
Congress can reach an agreement on these matters, there's no reason to stay
in DC to watch the leaves change.
Some have suggested that one or
both chambers could wrap up business this week after a ping pong match
involving the continuing resolution. The House would give conservatives the
opportunity to vote on a six-month CR before passing a three-month
resolution; the Senate would add Zika funding to the CR and send it back to
the House for a final vote before the funding resolution is sent to the
Senate. It's a lot easier said than done. We'll see what happens, but it's
possible (not probable) that Congress wraps up this week. Next week
seems a bit more likely.
But Before They
Go... Aside from the eventual consideration of a continuing
resolution, the House will consider the "Carl D. Perkins Career and
Technical Education Reauthorization Act" (H.R. 5587); the
"Regulatory Integrity Act of 2016" (H.R. 5226); the "Halt Tax
Increases on the Middle Class and Seniors Act" (H.R. 3590); the "VA
Accountability First and Appeals Modernization Act of 2016" (H.R. 5620);
and H.R. 5351, to prohibit the transfer of any individual detained at
Guantanamo Bay. It is also possible the House will consider a resolution
impeaching the IRS Commissioner.
The Senate will resume
consideration and vote on the motion to invoke cloture on the substitute
amendment to the "Water Resources Development Act of 2016" (S.
2848)." Consideration of a continuing resolution is expected later this
week.
As usual, we are following
committee meetings on both sides of the Capitol, including the following:
Tuesday
Calendar Impacts
Dynamics of the CHOICE Act Mark-Up:
On Tuesday, the House Financial Services Committee will consider H.R. 5983,
the Financial CHOICE Act. This legislation has been introduced by Chairman
Jeb Hensarling (R-TX) and represents a large scale overhaul of the 2010 Dodd-Frank
Act.
The legislation weighs in at 513 pages, and includes several provisions that would help reduce the regulatory burdens credit unions currently face, and help mitigate future ones. CUNA has had a lot of opportunity to influence this legislation, and many of the provisions have been discussed in testimony delivered by CUNA witnesses over the last few years. Our CEO Jim Nussle testified in support of Title I of the CHOICE Act back in July; this part of the bill would reduce regulatory burden for institutions with a leverage ratio above 10%. We outlined our support and concerns with this package in a July letter we delivered during a meeting with Committee staff.
We welcome the provisions that
would make structural changes at the CFPB, repeal the Durbin amendment,
address examination fairness, and reform the NCUA's Board and budget process.
For the many provisions that we support, Committee approval represents
progress in a complicated legislative process-- it puts them in a better
position to move even further in the future. We appreciate Chairman
Hensarling's leadership and tenacity in addressing credit unions' regulatory
burden, and we support his effort to keep the conversation going.
Nevertheless, the legislative
process rarely produces comprehensive legislation that can be completely
embraced. As they say, there's a bad apple in every bunch; and this bill has
two such provisions. One would permit savings and loans to choose to act as
national banks, circumventing the statutory cap on business lending to which
thrifts are subject, and the other would subject NCUA to the appropriations
process. We oppose both of these provisions, and in the event that this or
similar legislation moves forward, we will encourage Congress to remove them.
The late timing of this mark-up
heavily impacts the strategies taken by all interested parties, including
groups like CUNA. Republicans are not expected to offer any amendments to
their chairman's legislation; Democrats seem disinclined to engage in an
effort to force tough votes for both parties on a bill that is going nowhere
so close to the election. In other situations, and at other times, we might
have tried to remove the problematic provisions or add more credit union
provisions at mark-up. However, while there are very likely to be some
amendments put forward at the mark-up, this session is not expected to
resemble previous mark-ups on legislation of similar size and scope. The
curtain is closing on the 114th Congress, and these fights can and
will be taken up next year.
Check out this Removing Barriers blog
for more information regarding the provisions we support and oppose.
NCUA Board Meeting
on September 15: The NCUA will
be having its monthly Board meeting this Thursday. The Board will have no
voting items, but will cover a briefing on cybersecurity and hear the
customary quarterly update on the corporate stabilization fund.
CFPB Debt Collection
SBREFA Process Recognizes Distinction Between First and Third Party Debt Collection: In response to a SBREFA panel focused on third party debt
collection held in August,
and discussion proposals released
prior, we sent a letter to the CFPB expressing
credit union concerns. The letter thanked the CFPB for recognizing
the very significant differences between the relationships consumers have
with first party creditors versus third party debt collectors, as indicated
by the exclusion of first party creditors in the initial debt collection
SBREFA process. The letter also points out that when Congress enacted
the FDCPA, and for decades since, it has clearly recognized
that including credit unions in rules addressing abusive debt collection
practices is not necessary. [Read More]
Pending Regulatory
Comment Calls: CUNA intends to comment on the
following pending regulatory proposals. For our comment letter to have the
greatest impact, we need to hear from you. Please consider whether and how
these proposals would affect your credit union, and contact the CUNA staff
listed with each proposal with your feedback
We encourage Leagues and credit
unions to use PowerComment to file
comment letters with regulators. For more information regarding these
proposals, please follow the links below:
|
||||||||||||||||||||||||||||
|
That's All Folks!
4 years ago
Posts
0 comments:
Post a Comment