WASHINGTON (7/25/13)--Sens. Jon Tester (D-Mont.) and Jerry Moran (R-Kan.), both members of the Senate Banking Committee, are preparing to introduce a bill that would provide some regulatory relief for both community banks and credit unions.
Although the title of the Senate bill will be the same as similar legislation in the House, the Community Lending Enhancement and Regulatory Relief Act (CLEAR Act), the bills are not identical. The House bill was introduced this Spring by Rep. Blaine Luekemeyer (R-Mo.).
Nevertheless, like the Luetkemeyer bill, the Senate CLEAR Act would provide regulatory relief to credit unions and community banks, though focuses on banks.
The Senate bill includes four key provisions, two of which would benefit credit unions.
Those provisions would:
Eliminate an escrow requirement for high-priced, first lien mortgage loans; and
Provide a safe harbor from the Qualified Mortgage regulation to loans made by financial institutions under $10 billion and held in portfolio for more than three years.
The bill's other two provisions would provide:
An exemption for community banks from Section 404 of the Sarbanes Oxley Act with respect to the annual management assessment of internal controls requirement. Credit unions are not subject to Section 404; and
Direct the Federal Reserve Board to make certain changes to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors, which would not affect credit unions.
A bill introduced in June by House Financial Services Committee Vice Chairman Gary Miller (R-Calif.) (H.R. 2572) also would provide regulatory relief for credit unions and community banks. Miller's bill focuses on credit unions, and topics discussed within its section range from enhancements to National Credit Union Administration authority, to improved capital standards for credit unions, to a cost-benefit analysis of rules, past and present, and more.