Obama Signs Into Law Three Credit Union Regulatory Relief Measures

Three key credit union regulatory relief provisions were signed into law Friday by President Barack Obama. The provisions were passed as part of the Fixing America’s Surface Transportation (FAST) Act, which is a five-year, $305 billion highway funding package [some reporting from CUNA].

“The measures passed by Congress and signed into law by President Obama will reduce the unnecessary regulatory burden on credit unions,” said Troy Stang, President and CEO of the Northwest Credit Union Association. “Northwest credit unions have consistently led advocacy efforts for these measures over the past several years, and our region’s legislators were critical to bringing these measures to fruition. This is a huge win for the 5.2 million members of Northwest credit unions.”

The bill contains provisions that modernize privacy notification requirements, allow privately insured credit unions to join the Federal Home Loan Bank (FHLB) program, and direct the Consumer Financial Protection Bureau (CFPB) to establish a process for determining whether an area should be designated “rural,” which could impact the products credit unions in that area can offer.

“Recognition that CFPB regulations are not a one size fits all application is an important direction for ensuring that consumer protection is supported,” said Peninsula Credit Union President and CEO Jim Morrell. “All of Peninsula Credit Union’s five-county fields of membership are rural, however only two have thus far been recognized as such by the CFPB’s use of the USDA rural definition. This regulatory relief will allow us the flexibility to continue to serve our rural markets and fulfill our members’ lending needs by exempting us from requirements such as the Ability to Repay and QM standards for balloon payments.”

The House passed the bill Thursday afternoon with a 359-65 vote, and the Senate followed suit Thursday night with an 83-16 vote.

Northwest credit union advocates have been consistent voices calling for these regulatory relief provisions for several years, bringing the issues to their legislators’ offices on Hill visits.

“This legislative regulatory relief shows the power of consistent advocacy from credit union leaders, employees, and members,” said Jennifer Wagner, Senior Vice President of Advocacy for the Association. “Northwest advocates have been persistent and focused in calling for for regulatory relief for the past several years. The more advocates who raise their voices for credit unions, the more changes like this we can affect.”

Senator Jeff Merkley (D-OR) and Congressman Derek Kilmer (D-WA) both cosponsored the original Privacy Notification Modernization bill, and Congressman Denny Heck (D-WA) and Senator Merkley have supported regulatory relief for credit unions in their positions on the House Financial Services Committee and Senate Banking Committee, respectively.

All Northwest Senators and Members of Congress voted to pass the comprehensive highway bill in which the credit union relief measures were contained.

“Passage of these three provisions in both the House and Senate is a culmination of years of work by thousands of credit union advocates to help remove barriers and allow not-for-profit financial institutions to better serve their member owners,” said CUNA President and CEO Jim Nussle.

Questions about this story? Contact James Pearson: 206.340.4790, jpearson@nwcua.org.

Posted in Advocacy News, Article Post.