The Senate Banking Committee passed regulatory relief bill Tuesday morning that could provide significant lending relief to credit unions, according to the Credit Union National Association.
The Economic Growth, Regulatory Relief and Consumer Protection Act passed the committee with a vote of 16-7 Tuesday following a markup that morning.
“This bipartisan regulatory relief package is an example of what we can achieve when we work together,” said Senator Joe Donnelly (D-Indiana) in a Senate press release. “The proposal would provide long-awaited regulatory relief to community banks and credit unions unintentionally burdened by rules intended to hold Wall Street accountable.”
A few senators worried the Economic Growth, Regulatory Relief and Consumer Protection Act would roll back Dodd-Frank Wall Street Reform and Consumer Protection Act too far, giving big banks undue regulatory relief. Dodd-Frank was signed into federal law by former President Barack Obama in 2010 as a response to the financial crisis.
But the new regulatory relief bill contains provisions that would provide credit unions with much needed relief — something a few senators mentioned during Tuesday morning’s session. In particular, the bill contains a provision specific to credit unions that would exempt one-to-four, non-owner occupied residential loans from a credit union’s member business lending cap. Right now, government regulation prevents credit unions from lending more than 12.25 percent of their assets in most cases. CUNA estimates that exempting those specific residential loans from that cap would free up as much as $4 billion in additional capital credit unions could lend.
Other provisions of the bill would change mortgage servicing and lending rules, help protect reporters of suspected senior abuse and require the Treasury to study cyber risks.
The Economic Growth, Regulatory Relief and Consumer Protection Act was introduced in mid-November and was quickly applauded by credit union advocates.
“This legislation represents a significant breakthrough in bipartisan negotiations and contains many provisions that would improve the operating environment for credit unions and allow them more effectively to help their members realize their financial goals,” said Credit Union National Association President and CEO Jim Nussle in a CUNA press release.
The bill still has a ways to go before it becomes law and Nussle said advocates should remain vigilant.
“Advancing this bill through committee is a strong first step, but credit unions must remain engaged and keep up the momentum to get this bill to the finish line,” he said in a CUNA press release.
To watch a video of Tuesday’s markup, click here.