WASHINGTON—By a vote of 363-64, the House Thursday passed H.R. 22, which carries an amendment that would remove a number of regulatory barriers facing credit unions.
Prior to the vote, the credit union trade groups expressed strong support for the amendment to the highway funding bill.
Supporting the Hensarling Amendment #86 to the Senate Amendments to H.R. 22, the Hire More Heroes Act of 2015 (Senate DRIVE Act), CUNA President and CEO Jim Nussle stated that credit union employees and volunteers work every day to deliver service excellence to their members, “but there are several statutory and regulatory barriers that keep credit unions from more fully serving the savings and credit needs of their members. Chairman Hensarling recognizes the burdens those barriers create, and his amendment would help remove a few of those for credit unions.”
The Hensarling Amendment, sponsored by Rep. Jeb Hensarling (R-TX), includes many provisions that have previously passed the House Financial Services Committee and the House of Representatives, noted Nussle.
“In particular, credit unions support the provisions of this amendment that would permit privately insured credit unions to join the Federal Home Loan Bank System and the provisions that would modernize privacy notifications,” Nussle said.
Nussle emphasized that it is time for privately insured CUs to have access to the FHLB System.
“In 1989, in the wake of the savings and loan crisis, the FHLB System was opened up for the first time to commercial banks and credit unions. Unfortunately, the bill was drafted in such a way to apply only to an ‘insured credit union’ as defined under the Federal Credit Union Act. If the legislation had used a broader term in the 12 USC 1752 of the Federal Credit Union Act – such as ‘state credit union’ or ‘state-chartered credit union’ which are clearly defined – then privately insured credit unions would have the same opportunity for membership as other financial institutions,” wrote Nussle. “This is why, for many years, we have suggested that this was likely an oversight in drafting. Unfortunately, it has meant for over two decades, a small group of credit unions have been denied the right to even apply for membership in the FHLB System.”
Urging House leaders to support Hensarling’s legislation that would modernize privacy notification rules, Nussle said that the current guidelines impose a significant cost on credit unions and produce very little consumer benefit.
“Since 2001, credit unions alone have sent over one billion privacy notices to their members, averaging over 87,000,000 notices a year,” Nussle wrote. “A voter survey conducted in 2013 showed that fewer than one-quarter of consumers read the privacy notifications they receive, and over three-quarters of consumers would be more likely to read them if they were only sent when the financial institution changed its policy. This suggests that the public policy goal of privacy notifications would be better achieved if the notices had more meaning to consumers. We believe that this legislation achieves this goal.”
NAFCU Vice President of Legislative Affairs Brad Thaler told CUtoday.info that privacy notification rules represent outdated regulation that needs updating.
“The privacy notification rules are something we been addressing with the Financial Services Committee and the House, and they are an element our Five Point Plant for credit union regulatory relief,” said Thaler prior to the vote. “This is a provision that has passed the House numerous times in the past, and we are hopeful that it will be included and passed again here . . . But the bigger question is how many amendments will be allowed on the Transportation bill.”