Letter to Members of the House Financial Services Committee regarding regulatory relief
May 16, 2003
On behalf of the Credit Union National Association (CUNA) and the nation's 10,300 credit unions and 83 million credit union members, I would like once again to urge you to support important legislation to relieve America's depository institutions of unneeded and burdensome regulations.
As you proceed to mark up The Financial Services Regulatory Relief Act of 2003 (H.R. 1375), I want to reassure you that CUNA supports the measure as it was reported out of the Financial Institutions Subcommittee last month and remains strongly committed to each of the provisions included in Title III. We oppose any amendments that would weaken these provisions or impose new burdens on credit unions.
As you know, the last major changes to the Federal Credit Union Act occurred in 1998. The past five years have provided an opportunity to identify unnecessary and outdated provisions and recommend common sense improvements. H.R. 1375 focuses on removing regulatory burdens and improving productivity and efficiency in a competitive and dynamic marketplace.
The key provisions of H.R. 1375 that are of critical importance to our nation's credit unions seeks to:
- Allow a minimal charge for leases of land on federal facilities for credit unions.
- Provide credit unions with additional authority to make safe and sound conservative investments, allowing credit unions to remain competitive in an ever-changing marketplace.
- Expand the lending authority of credit unions from 12-year maturity limitations to 15-years.
- Raise the limit on investments in credit union service organizations (CUSO's) from 1% to 3% of shares and undivided earnings, allowing credit unions to retain control over the quality of services offered as well as the prices paid.
- Lift the numerical limitation on employee groups from voluntary mergers of healthy credit unions, permitting them to combine financial strength and improve services to members.
- Authorize credit union boards to protect personnel and customers by giving them the flexibility to expel disruptive and dangerous members without meeting the current requirement of two-thirds vote of membership present.
- Permit privately insured credit unions to apply for membership in the Federal Home Loan Bank system (FHLB).
- Exempt federally insured credit unions from the Securities and Exchange Commission's (SEC's) costly broker-dealer and investment advisor registration requirements, similar to the exception already provided to banks.
- Exempt federally insured credit unions from pre-merger filing notification, and costly Federal Trade Commission (FTC) fees, providing parity with banks and thrift institutions.
- Give NCUA more flexibility to adjust the usury ceiling, making it easier for credit unions to serve the underserved.
I am also pleased to see that two separate pieces of legislation that CUNA supports have been incorporated into H.R. 1375. The Expanded Access to Financial Services Act (H.R. 1492), which was originally introduced by Congressman Ose, will allow credit unions to expand check cashing and money transfer services to anyone who is eligible to become a member. This not only enables credit unions to reach out to underserved and unbanked individuals - it also provides access to a safe, reliable and affordable method to transfer funds to family in over 40 countries, as well as an opportunity to learn about mainstream financial services.
Additionally, I am pleased that The Faith-Based Lending Protection Act (H.R. 383), originally introduced by Congressman Royce, remains in H.R. 1375. By excluding Member Business Loans made by federally insured credit unions to nonprofit religious institutions from an arbitrary cap, this important measure will ensure that credit unions can continue to meet the needs of their members and the surrounding community.
In closing, CUNA strongly supports the Financial Services Regulatory Relief Act of 2003 (H.R. 1375) because it translates into greater and lower-cost services to credit union members and I ask for your support at the full committee mark up, as well as to ensure swift floor action.
Thank you for your time and consideration.
Daniel A. Mica
President & CEO