WASHINGTON—With six different pieces of legislation of importance to credit unions now before the House Financial Services Committee, NAFCU has sent a letter offering support for each, saying the measures will provide “regulatory relief” to CUs.
The text that appears below each of the half-dozen House bills is from NAFCU’s letter to the committee:
H.R. 1529, the Community Institution Mortgage Relief Act of 2015
This legislation from Rep. Sherman and Chairman Luetkemeyer would that amend the Truth in Lending Act to provide a legal safe harbor from escrow requirements for smaller financial institutions, under $10 billion in assets, that hold loans in portfolio for three years. The existing escrow rules drive small creditors from the mortgage market because it is difficult to provide cost-effective escrow services. The legislation also makes key changes for servicers that annually service 20,000 or fewer mortgage loans. Given their track record, small servicers such as credit unions should be incentivized to continue to service mortgage loans. While NAFCU believes all credit unions should receive the exemptions provided in both provisions (as we generally do not support bifurcating the industry by arbitrary asset size), this bill does provide some relief on two important issues impacting NAFCU member credit unions and we would support its passage.
H.R. 650, the Preserving Access to Manufactured Housing Act of 2015
This bipartisan legislation introduced by Reps. Fincher, Sewell, Barr, and Sinema would modify the definitions of a mortgage originator and a high-cost mortgage to ensure that consumers of small-balance mortgage loans, including manufactured housing loans, will have access credit. Working families across the country, particularly in rural America, depend on access to financing for affordable manufactured homes and this bill addresses an important barrier to entry in the marketplace.
H.R. 1259, the Helping Expand Lending Practices in Rural Communities Act
This bipartisan legislation introduced by Reps. Barr and Hinojosa would be helpful to small creditors, including credit unions, as they deal with the CFPB’s definition “rural area” particularly as it relates to the ability-to-repay rule
H.R. 1480, the SAFE Act Confidentiality and Privilege Enhancement Act
This legislation introduced by Rep. Dold would amend the SAFE Mortgaging Licensing Act of 2008 to allow state and federal regulatory officials with financial oversight authority access to any information given to the Nationwide Mortgage Licensing System and Registry without loss of privilege or confidentiality protections.
Providing credit unions greater relief from CFPB burdens is also an important element of NAFCU’s Five Point Plan for Credit Union Regulatory Relief. The ability for credit unions to provide input and feedback to the CFPB and the transparency of the process are important aspects of this.
H.R. 1195, the Bureau of Consumer Financial Protection Advisory Boards Act
This bipartisan legislation introduced by Reps. Pittenger and Heck would codify in statute some of the advisory boards and councils at the CFPB, including the Credit Union Advisory Council. NAFCU members actively participate in the Credit Union Advisory Council at this time and NAFCU continues to believe a robust dialogue about how various CFPB initiatives will impact credit unions in practice is invaluable to the Bureau.
H.R. 1265, the Bureau Advisory Commission Transparency Act
This legislation introduced by Chairman Duffy would apply requirements of the Federal Advisory Committee Act to the CFPB. In effect, this would ensure CFPB Credit Union Advisory Council meetings are open to the public and all minutes and reports are made available to the public. As noted above, NAFCU believes the Credit Union Advisory Council plays an important role in informing the CFPB of how various rules and regulations would impact credit unions in practice, and encourages the bureau to take these discussions into account throughout the rule making process.
Finally, we hope this mark-up is the first step in addressing regulatory relief for community financial institutions such as credit unions. As NAFCU testified last week, there are a number of additional areas where credit unions need relief including additional capital reforms, field-of-membership improvements and requiring regulators to perform robust cost-benefit analyses of regulations. We would urge the committee to tackle these and other areas, including NCUA budget transparency, as you continue your work on regulatory relief.