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Charter enhancement bills on the horizon
WASHINGTON (2/5/13)--Credit union charter enhancement legislation, such as member business lending and supplemental capital bills, are expected to be unveiled in the coming weeks, and the Credit Union National Association is setting the table for these bills by seeking congressional support now.

CUNA has discussed the upcoming bills in recent meetings with Senate Banking Committee members, and the bipartisan appeal of both bills has been a consistent point of emphasis during those meetings, CUNA Senior Vice President of Legislative Affairs Ryan Donovan said. CUNA is asking senators how the appeal of the bills could be maximized through additional tweaks, he noted.

Both bills met banker opposition last year, but "CUNA anticipates the merits of the bills will be considered, and that those merits will win the day," Donovan said.

Rep. Ed Royce (R-Calif.) is preparing the MBL legislation, and Rep. Peter King (R-N.Y.) is readying the supplementary capital bill. Both pieces of legislation will be virtually identical to bills that were introduced last year, Donovan noted. There may be some changes to portions of the supplemental capital bill that address transparency and disclosures, he said.

Last year's House and Senate MBL bills, H.R. 1418 and S. 509, sought to increase credit unions' current 12.25%-of-assets MBL cap to 27.5% of assets. The bills, if enacted, would help credit unions lend an additional $13 billion to small businesses. This money, which would be made available at no expense to taxpayers, would in turn help small businesses create over 140,000 new jobs in the first year after enactment.

The 2012 supplemental capital legislation (H.R. 3993) would have permitted the National Credit Union Administration to allow credit unions to accept additional forms of capital, provided it does not alter the cooperative ownership structure of credit unions.

"The point we make when discussing MBL legislation is this: There are credit unions that served business-owning members before and during the financial crisis. Now that the crisis is over, they want to keep working with those members," Donovan said.

CUNA Senior Vice President of Political Affairs Richard Gose noted that a coalition of small business groups continue to support increasing the MBL cap for credit unions.

Banker groups strongly objected to both bills last year, and CUNA pushed back, successfully opposing legislation that would have extended the Transaction Account Guarantee (TAG) for banks. Bankers have also harmed their own bills to prevent credit union legislation from moving forward. "Banks may realize that they need to abandon this scorched-earth policy if they want to get their own legislation passed through Congress," CUNA Executive Vice President of Legislative Affairs John Magill pointed out.


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