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CUNA urges Senate action on four regulatory relief bills
(November 17, 2014) — Today, CUNA sent a letter urging support of four regulatory relief bills during the lame duck session that would be a good first step in removing barriers that impede credit unions from fully serving their members: S. 2699, a bill that extends Share Insurance Coverage to Lawyer Trust Accounts (IOLTA); S. 1806, the Capital Access for Small Community Financial Institutions Act; S. 635, the Privacy Notice Modernization Act; and S. 1577, the Mortgage Choice Act.
See the full letter below:
November 17, 2014
Members of the United States Senate
Washington, DC 20510
Dear Senator,
On behalf of the Credit Union National Association (CUNA), I am writing to urge the Senate to approve four bills during the lame duck session that would be a good first step in removing barriers that impede credit unions from fully serving their members: S. 2699, a bill that extends Share Insurance Coverage to Lawyer Trust Accounts (IOLTA); S. 1806, the Capital Access for Small Community Financial Institutions Act; S. 635, the Privacy Notice Modernization Act; and S. 1577, the Mortgage Choice Act. CUNA is the largest credit union advocacy organization in the United States, representing our country’s 6,600 state and federally chartered credit unions and their 100 million members.
S. 2699, a bill that extends Share Insurance Coverage to Lawyer Trust Accounts (IOLTA)
The National Credit Union Administration (NCUA) has interpreted it does not have the authority under the Federal Credit Union Act to extend share insurance coverage to lawyer trust accounts and other similar accounts on the same basis as similar accounts insured by the FDIC. S. 2699, introduced by Senators King (I-ME) and Warner (D-VA) would direct the NCUA to issue a regulation extending share insurance to owners of the funds held in trust accounts opened and managed by credit union members. This bill is a parity bill which provide credit unions the same opportunity as other financial institutions to serve their members and the community. A companion bill in the House of Representatives passed by voice vote in May.
S. 1806, the Capital Access for Small Community Financial Institutions Act
S. 1806, introduced by Senators Brown (D-OH) and Portman (R-OH) would make privately insured credit unions eligible to join the Federal Home Loan Bank System, correcting a drafting error from the 1989 legislation that opened the Federal Home Loan Bank system to commercial banks and federally insured credit unions. This legislation would strengthen the safety and soundness of the 130 privately insured credit unions in the country by opening access to additional liquidity. The legislation would not enhance risk to the Federal Home Loan Bank System, as the size of these credit unions is relatively small and the company that insures them is regulated by the same state regulators that oversee many of the members of the Federal Home Loan Bank system. A companion bill in the House of Representatives passed by a vote of 395-0 in May.
S. 635, the Privacy Notice Modernization Act
The Privacy Notice Modernization Act, introduced by Senators Brown (D-OH) and Moran (R-KS) would reduce credit union regulatory burden and enhance consumer protection by amending the Gramm-Leach-Bliley Act to require credit unions to send privacy notices to existing members only when the credit union changes its privacy policy. The privacy policy would also be available to members on demand and on the credit unions’ website. The annual privacy notice requirement is unnecessary, costly and confusing to consumers. Many discard the notice without reading it. We believe that requiring the notice to be mailed only when the policy is changed will make the notice more meaningful to credit union members. A companion bill in the House of Representatives passed on suspension during the first session of this Congress.
S. 1577, the Mortgage Choice Act
The Mortgage Choice Act, introduced by Senators Manchin (D-WV) and Johanns (R-NE) would exclude the points and fees associated with affiliated companies for purposes of determining whether or not a mortgage meets the Consumer Financial Protection Bureau’s qualified mortgage definition under its ability-to-repay rule. Defining points and fees in this way will maintain a competitive marketplace, prevent over-pricing or limiting choice in low-moderate income areas and allow consumers to enjoy the existing benefit of working through one mortgage provider. A companion bill passed the House of Representatives earlier in this Congress.
Credit unions are enduring a crisis of creeping complexity with respect to regulatory burden. The ever-increasing, never-decreasing regulatory burden erects barriers to their ability to serve their members. The enactment of these bills would represent a small step in the right direction toward removing barriers to credit union service. As the Senate reassembles for the remaining weeks of the 113th Congress, we urge passage of these important bills.
On behalf of America’s credit unions and their 100 million members, thank you for your attention to these important bills and we look forward to working with you to get these four bills passed and signed into law.
Sincerely,
Jim Nussle
President & CEO