House Committee to Examine Dodd-Frank Impact as Banks Reveal Possible Piggyback for MBL Bill

The House Financial Services Committee will be examining the Dodd-Frank Act’s impact this week as the Wall Street reform package celebrates its second anniversary.

The House Financial Services subcommittee on capital markets and government-sponsored enterprises will hold the first of several committee hearings today, exploring the effect Dodd-Frank has had on U.S. capital markets, businesses, investors, and consumers. The hearing is expected to focus on derivatives regulation, risk retention, single counter-party credit limits, and the Volcker Rule, which is meant to ban banks from making certain speculative investments.

The House Judiciary subcommittee on intellectual property, competition and the Internet has scheduled its own hearing for today entitled, “Impact of Dodd-Frank Act: Financial Services Competition.” The House Financial Services subcommittee on financial institutions and consumer credit will hold a hearing Wednesday called, “Impact of Dodd-Frank Act: Mortgage Banking.”

Meanwhile, advocacy efforts behind S. 2231, the Small Business Enhancement Act, continue to press forward as credit unions work to raise the cap on member business lending (MBL) from 12.25 percent of assets to 27.5 percent. Many are now focused on packaging the bill with bank-friendly legislation in an effort to push past the current state of gridlock that has many legislators hesitant to support or reject the bill for fear of alienating supporters.

The Credit Union Times reported today that S. 2231 could soon be attached to a bill that would extend transaction account guarantee (TAG) insurance for bankers’ banks—the institutions that serve community banks. While no such bill currently exists, the banks are advocating to extend the coverage beyond its current expiration date of Dec. 31, 2012, and it is seen as a possible companion measure for S. 2231.

TAG insurance was established in response to the 2008 financial crisis as a way to prevent sudden mass withdrawals, and the bankers’ banks are now pushing for the extension of the coverage through the Federal Deposit Insurance Corporation (FDIC) for more than $1 trillion in small-business deposits. Credit unions have comparable coverage through the National Credit Union Administration (NCUA), but their coverage is set to expire at year’s end along with the banks’.

 

Questions? Contact a member of the Association’s Legislative Affairs team:

Jennifer Wagner, Vice President of Legislative Advocacy
Mark Minickiello, Vice President of Legislative Affairs
Stacy Augustine, Senior Vice President & General Counsel

Posted in Advocacy News, Around the NW, Events.