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Nowhere Near The Finish Line

As the new, 110th Congress settles down to business, credit unions will once again be seeking needed relief from outdated and burdensome regulations in an updated version of the Credit Union Regulatory Improvements Act, or CURIA. NAFCU has been working with Reps. Paul Kanjorski (D-PA) and Ed Royce (R-CA), the original cosponsors of the previous versions of the bill, to help ready the latest iteration of this vital legislation, and we hope it will be ready for introduction very soon.

If passage of major legislation can be likened to a long-distance run, it's important to remember that we made significant progress in the race for regulatory relief in the just-concluded 109th Congress. Not only did we enlist more cosponsors for CURIA than ever before (more than 120), but we saw the enactment of a separate relief package championed by former House Financial Services Chairman Mike Oxley (R-OH) and Senator Mike Crapo (R-IN).

And while the final version of the Financial Services Regulatory Relief Act (S. 2856) turned out to be a slimmed down version of a more robust House bill that NAFCU would have preferred, the Reg Relief bill nonetheless contained four provisions important to credit unions.

Perhaps you could say that passage of S. 2856 was a warm-up for the real workout facing us in this Congress-securing the passage of a full-fledged relief bill for credit unions.

In this year's version of the bill, NAFCU will again be seeking inclusion of a risk-based capital/PCA reform provision that was part of CURIA last time and first proposed by the NCUA in early 2005. NAFCU has long argued that treating all types of capital that a credit union holds as having the same risk doesn't make sense. Under the current one-size-fits-all regime, a 10-year personal loan in its first year with no collateral is judged the same as a 30-year mortgage in its last year of payment. And since credit unions, which carry less risk, are unable to go to the open markets to raise capital, NCUA's risk-based capital proposal would help alleviate capital constraints by better matching the capital requirements to the risk inherent in different types of assets.

Other important provisions likely to be reprised in a new version of CURIA include increasing credit union member business lending authority. NAFCU believes that the removal or modification of the arbitrary 12.25% cap imposed as part of the Credit Union Membership Access Act in 1998 is an important step in allowing credit unions to better serve their members.

Of course, credit unions have their work cut out for them as they attempt to build on the momentum created in the 109th Congress. But we've already gotten off to a fast start with several members of the NAFCU Board, along with the NAFCU staff, walking the halls of Congress when the 110th Congress convened last month. The new Congress and its new leadership create a new playing field for the bill, which means new opportunities, but also new potential pitfalls. With so many new faces and new leaders on Capitol Hill, it is more important than ever that credit unions make their voices heard. If we can successfully build on the momentum that was gained in the 109th Congress, we have an opportunity to see progress on CURIA moving forward in the new Congress. It is important that we do not let this momentum slip away.

Once the legislation is introduced, NAFCU will seek to garner even more cosponsors than we did when the 109th Congress adjourned sine die. We will be calling on all credit unions to ask their members of Congress to sign onto the bill.

I know that many of you have already answered NAFCU's call to contact your representatives and urge that they express their interest in CURIA to Reps. Kanjorski and Royce. It's important for you to contact Reps. Kanjorski and Royce as well and thank them for their leadership and support of credit unions on this matter. The bankers have made stopping CURIA one of their top goals, and if you don't make the case to your elected officials as to why your credit union would like to have the relief in CURIA, you can bet that the bankers will be glad to make the case as to why you shouldn't get it. Don't let the banker voice be the only one heard.

I hope that you will join us in our effort secure passage of this important legislation.

Bradford Thaler is director of legislative affairs for the National Association of Federal Credit Unions. He can be reached at bthaler<at>nafcu.org or 800-336-4644.

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