Congress introduces fresh CURIA bill

WASHINGTON (3/16/07)--Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) yesterday introduced the 2007 Credit Union Regulatory Improvements Act (CURIA, H.R. 1537), a bill intended to modernize the credit union regulatory structure to improve service to members.

The new bill is similar to the 2006 version, but with the addition of two key provisions: One addressing field of membership rules, the other establishing additional consumer safeguards in the event of a credit union conversion to another form of financial institution.

Last year, a CURIA bill drew the support of a total of 126 co-sponsors from both political parties. This year's bill drew the fire of bankers before it was even introduced in the House, when bankers campaigned on Capitol Hill to promote opposition four weeks before the bill even made its public debut.

The Credit Union National Association (CUNA) and the National Association of Federal Credit Unions (NAFCU) immediately commended Kanjorski and Royce for spearheading the effort on a 2007 bill.

"On behalf of CUNA and our thousands of member credit unions nationwide, our thanks to the sponsors of H.R. 1537, for introducing this important legislation," said Dan Mica, CUNA president/CEO.

"The ultimate goal of any credit union is to better serve its members. CUNA's aim is to ultimately have enacted legislation that gives credit unions as much flexibility as possible to realize their goal," he added.

"We commend Chairman Kanjorski and Rep. Royce for their work on this vital legislation," said Fred Becker, president/CEO of the National Association of Federal Credit Unions. "We believe CURIA is essential to maintaining the viability of credit unions and ensuring that they remain a low-cost financial alternative for millions of Americans. NAFCU looks forward to building support for the bill in Congress."

As introduced, H.R. 1537 would, in part:

• Incorporate the National Credit Union Administration's prompt corrective action (PCA) reform/risk-based capital proposal to modernize net worth standards, thus freeing up additional capital for credit unions to provide their members with better and more affordable services; and

• Increase the current cap on loans to members for business purposes (MBLs) from 12.25% to 20% of assets, allowing credit unions to assist more members start and expand small businesses and to promote economic growth. The bill would also exempt loans under $100,000 and those to nonprofit religious organizations from the MBL calculation.

• Establish additional consumer safeguards to ensure even greater participation and transparency in the process of converting credit unions to another type of financial institution, including the requirement that at least 30% of a credit union's members participate in any vote to convert to a mutual savings bank; and

• Clarify the 1998 Credit Union Membership Access Act to allow all credit unions, regardless of charter type, to serve those in underserved areas. The bill would also update the definition of an underserved area, incorporating definitions from the Community Development Financial Institutions Act and the New Markets Tax Credit.

Other provisions of the 2006 CURIA legislation were broken out and included in the Financial Institutions Regulatory Relief Act, which increased general loan maturity limits to 15 years for federal credit unions, as well as allows them to provide certain services to nonmembers.

Ten members of Congress immediately became cosponsors of the fresh credit union bill:

• Dan Burton (R-Ind.);
• Ken Calvert (R-Calif.).
• Steve Chabot (R-Ohio); and
• Luis Gutierrez (D-Ill.);
• Steve LaTourette (R-Ohio);
• Carolyn Maloney (D-N.Y.);
• Grace Napolitano (D-Calif.);
• Solomon Ortiz (D-Texas);
• Ron Paul (R-Texas);
• Brad Sherman (D-Calif.);