WASHINGTON (7/29/09)--The House Financial Services Committee on Tuesday added an amendment that would take most credit unions out from under part of its executive compensation bill by exempting financial institutions with less than $1 billion in total assets from portions aimed at curbing some incentive-based compensation structures. This amendment, which was offered by Rep. Jeb Hensarling (R-Texas) early on Tuesday, was added to H.R. 3629, the Corporate and Financial Institution Compensation Fairness Act of 2009, which passed into the full House via a 40-28 committee vote. Sections of the bill which addressed incentive-based compensation would require financial institutions to disclose compensation structures that include any incentive-based elements. Portions of the legislation grant regulatory powers over any compensation structure or incentive-based payment arrangement that is determined to encourage inappropriate risks by financial institutions that could threaten the safety and soundness of a given institution or, more broadly, harm the economy as a whole. The National Credit Union Administration (NCUA) already has compensation regulations in place that are designed to prevent many risky compensation structures, and the Credit Union National Association (CUNA) has recently communicated this message to legislators. While an anticpated amendment that specifically would have exempted credit unions from portions of H.R. 3629 was not offered, credit unions would be shielded from the executive compensation legislation by the aforementioned exemption. Rep. Joe Baca (D-Calif.) did not offer his amendment because other amendments with similar protections for credit unions were added to the bill. After the committee vote, Baca said in a release that his amendment would have exempted credit unions because "I was concerned the legislation would force an unfair burden on innocent parties that had nothing to do with our current financial crisis." He added that he withdrew his amendment believing the Hensarling language was a "responsible compromise that would exempt smaller credit unions and financial institutions.” However, CUNA continues to work with legislators to try to secure a credit union-specific exemption added to the bill. Rep. Barney Frank (D-Mass.), who chairs the committee, offered a manager's amendment that excluded both entities that do not pay their employees through incentive-based compensation and so-called “smaller” financial institutions from some of the regulatory scrutiny proposed under the bill. According to Frank’s amendment, the Securities and Exchange Commission would have the freedom to determine what constitutes a small financial institution. The bill will now be considered by the full House, and it could be brought up for discussion as soon as this Friday.