Press
NAFCU Letter to HFSC leaders ahead of tomorrow’s markup of regulatory relief measures
July 28, 2014
The Honorable Jeb Hensarling
Chairman
House Financial Services Committee
United States House of Representatives
Washington, D.C. 20515
The Honorable Maxine Waters
Ranking Member
House Financial Services Committee
United States House of Representatives
Washington, D.C. 20515
Re: Tomorrow’s Markup of Regulatory Relief Measures
Dear Chairman Hensarling and Ranking Member Waters:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents the interests of our nation’s federal credit unions, I write today as the committee prepares to markup several bills of interest to credit unions. Although work remains to be done, NAFCU members appreciate the committee’s commitment to provide regulatory relief for credit unions. We are hopeful that the measures being addressed tomorrow will be a starting point for relief from the increasing regulatory burden our nation’s credit unions face.
First and foremost, NAFCU has reviewed the bipartisan Community Bank Mortgage Servicing Asset Capital Requirements Study Act (H.R. 4042) introduced by Representatives Luetkemeyer and Perlmutter that would delay the implementation of Basel III regulations on mortgage servicing assets until an impact study is conducted and alternatives are explored. Given the circumstances credit unions find themselves in with NCUA’s risk-based capital proposal, NAFCU believes this is an appropriate vehicle to include a similar study requirement to be carried out by NCUA pertaining to its proposal and we would urge the Committee to support the amendment to be offered by Representative Luetkemeyer in this regard.
Enacting this amendment would be an important step to help ensure that the agency, credit unions, Congress and others fully understand and comprehend all impacts of the risk-based capital proposal, especially as those that relate to mortgage servicing assets, before moving forward. Furthermore, the additional time provided by the study could help ensure that broader changes are done right in any final proposal.
Second, NAFCU supports The Regulation D Study Act (H.R. 3240), introduced by Representatives Pittenger and Maloney that would mandate the Government Accountability Office to study the impact of the Federal Reserve Board’s monetary reserve requirements on depository institutions, consumers and monetary policy.
As you are aware, Regulation D limits a credit union member’s ability to transfer their money between savings and checking accounts to six transactions per month. Once a transaction is made beyond that limit, a member is either charged a fee or their savings account is re-classified as a “transaction account”. Under current Regulation D rules, savings accounts are not subject to reserve requirements, while transaction accounts are. This discrepancy tends to be confusing for credit union members and often forces credit union employees to focus their attention on the compliance issue rather than customer service.
Federal Reserve Regulation D is a prime example of a regulation that has not been reconsidered by Congress or the agencies in far too long. NAFCU believes a study of whether this outdated monetary reserve requirement imposed on depository institutions and consumers is necessary and would show strong evidence for the regulation’s full repeal.
Third, NAFCU supports the Access to Affordable Mortgages Act (H.R. 5148), introduced by Representative Luetkemeyer. The bill would exempt higher-risk mortgages of $250,000 or less from appraisal requirement provisions under the Truth in Lending Act if the lender holds the loan in portfolio for at least 3 years. This bill would also provide important legal safeguards for lenders acting in good faith throughout the appraisal process. As the committee reviews this bill for potential improvements, NAFCU would recommend raising the $250k threshold to a higher level.
Finally, NAFCU supports the concept of H.R. 3913, introduced by Representative Duffy, to amend the Bank Holding Company Act of 1956 to require agencies to make certain considerations relating to the promotion of efficiency, competition, and capital formation before issuing or modifying certain regulations. As you consider improvements to this legislation, we would urge the committee to include parallel language to apply such a standard to the NCUA and the CFPB as appropriate.
Thank you for the opportunity to share our thoughts as the committee considers these important measures. We look forward to working with you as these issues move forward. If you have any questions or would like further information, please do not hesitate to contact me or NAFCU’s Director of Legislative Affairs, Jillian Pevo, at (703) 842-2836 or jpevo@nafcu.org.
Sincerely,
Brad Thaler
Vice President of Legislative Affairs
cc: Members of the House Financial Services Committee