WASHINGTON (5/21/10)—Despite achieving numerous improvements to the Restoring American Financial Stability Act (RAFSA), the Credit Union National Association (CUNA) ultimately opposed the financial regulatory reform package approved by the U.S. Senate late Thursday when it included provisions that would allow the government to intervene in setting interchange fees. The Senate voted 59 to 39 to pass the legislation, which was created in response to the economic crisis of 2008 and is intended, overall, to prevent a repeat in the future. CUNA backed the intent of the reform bill noting that as the nation recovers from the most significant financial crisis since the Great Depression, it was unquestionable that the statutory regime governing the regulation of financial services needed to be improved. Those improvements, CUNA urged however, must come in a balanced manner that corrects the shortcomings of the system that contributed to the crisis, protects the financial system from future systemic threats, and does not adversely affect those parts of the system that have performed well throughout the crisis, such as credit unions. CUNA worked closely with Senate lawmakers as they crafted their reform bill over many months, and sought many improvements on behalf of credit unions which were ultimately included in S.3217. The improvements included:
* Retention of the National Credit Union Administration (NCUA) as the prudential regulator of credit unions; * Inclusion of language that directs a new Bureau of Consumer Financial Protection to guard against burdening credit unions and other financial institutions with burdensome duplicative regulations by ensuring that outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burdens; and * Designating that the NCUA examine credit unions with less than $10 billion in total assets for compliance with consumer protection regulations.
CUNA opposed an amendment that would cap ATM-related fees at 50 cents. Those amendments were never successfully brought up for a vote. In a letter early this month, CUNA President/CEO Dan Mica wrote to all senators: "We do not dispute the need for financial regulatory reform legislation, and we recognize that much of this bill's focus is on correcting regulatory shortcomings that have little or nothing to do with credit unions." However, the CUNA leader warned at the time that if the Senate adopted interchange amendments drafted by Sen. Richard Durbin (D-Ill.), it would prompt CUNA to vigorously oppose the legislation. Mica said Thursday, "Although we worked with Sen. Durbin in good faith to make changes to the language passed by the Senate last week, and we believe Sen. Durbin is sincerely concerned about credit unions, an agreement that would satisfy credit unions concerns could not be reached." Specifically, CUNA is concerned that the Durbin amendment would allow merchants to discount among preferred networks and also provide certain discounts for cash, check and debit card payments. CUNA has urged changes that would ensure that merchants cannot discriminate based on the issuing institution. The regulatory reform package may now take one of two routes to become law. The House and Senate most likely will go to conference to work out differences between the Senate bill and a similar one approved by the House earlier this year. During this process, CUNA would continue to work to lessen the interchange amendment’s impact should it survive the conference process. Less likely but possible, the House could accept the Senate bill language and vote on that package. Either process requires that a bill is signed by the President to become law.