WASHINGTON -- Credit unions could play a bigger role in the economy under a tailored regulatory structure, CUNA and all 38 credit union leagues wrote to Senate Banking Committee leadership Friday. In the letter, CUNA and the leagues listed 4 proposals that could create economic growth by fostering a more favorable environment for credit unions.

“America’s credit unions have become a growing and more essential part of the American economy. Still, the law in many areas holds credit unions back from doing even more for their members, their communities and the economy in general,” the letter reads. “We hope you will give the proposals we have put forward full and fair consideration, and we look forward to working with you toward ensuring credit unions can continue to do their part to grow the economy.”

The proposals are:

  • Enhance the Consumer Financial Protection Bureau (CFPB) exemption authority to give the CFPB clearer direction that its rules should not impede access to credit union services. CUNA encouraged the Senate Banking Committee to consider legislation consistent with H.R.1264, which would exempt institutions with under $50 million in assets from CFPB rules;
  • Establish parity in the treatment of certain multi-family residential loans offered by credit unions, which are considered real estate loans for banks, but are subject to the member business lending cap for credit unions. CUNA encouraged the committee to consider S.836, a bill that would provide such parity;
  • Eliminate the statutory credit union member business lending cap, which CUNA believes would free up significant additional capital for small businesses. CUNA estimates elimination of the cap would provide nearly $5 billion in new small business lending, helping to create more than 54,000 jobs in the first year alone. CUNA encouraged the committee to consider legislation to repeal that section of the Federal Credit Union Act; and
  • Modernize credit union field of membership restrictions by making the following changes to the Federal Credit Union Act:
    • Removing the word “local” from the definition of “well-defined, local community";
    • Allowing certain charter types to easily serve “underserved areas”;
    • Eliminating the necessity for a physical office or facility to establish the ability to serve an underserved area; and
    • Eliminating unnecessary paperwork for deciding that a particular group should be allowed to join a federal credit union.

“The Banking Committee asked for us to submit economic growth proposals, and our letter identifies proposals that we think would have a very significant impact on credit union members and communities,” said CUNA Chief Advocacy Officer Ryan Donovan. “However, there is more Congress could do to reduce credit unions regulatory burden and allow them to more fully serve their members.  An improved regulatory structure, beginning with CFPB reforms, would also go a long way in this regard, and we will continue to encourage Congress to proceed with this type of legislation.”

Several of the principles are part of CUNA’s bipartisan, pro-consumer Campaign for Common-Sense Regulation, which aims to reduce regulation on credit unions by compelling Congress to end one-size-fits-all regulations better suited for Wall Street than credit unions on Main Street.


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