Removing Barriers Blog

Highway Bill Conference Report Removes Regulatory Barriers
Posted December 01, 2015 by CUNA Advocacy

Congress gave credit unions a big win today. The Highway Bill conference committee's new draft highway and transit bill contains several credit union regulatory relief measures that we have strongly and repeatedly advocated for. The conference committee signed off on draft legislation that works out the differences between versions previously approved by the House and Senate. The draft creates a compromise version expected to be approved this week by both chambers.

For credit unions, the highway package includes provisions that would:

• Modernize privacy notification requirements to allow credit unions and all financial institutions to only send notices when there is a policy change, not on an annual basis;
• Allow privately insured credit unions to become members of the Federal Home Loan Bank (FHLB) system; and,
• Direct the CFPB to establish an application process to designate an area in which the business is located as a 'rural area' for purposes of a federal consumer financial law.

A designation of 'rural' by the CFPB has many implications for credit unions, particularly for mortgage products. This designation provides relief from many of the new mortgage provisions under TILA, RESPA, and QM.

The conference bill also dropped a provision we adamantly opposed that would have allowed Congress to use Federal Housing Finance Agency guarantee fees (g-fees) for purposes beyond protecting against credit-related losses in the mortgage portfolios of Fannie Mae and Freddie Mac. That contested provision would have increased g-fees and extended the fee's expiration date by four years to 2025.  

Last month, we joined a coalition of financial organizations in a letter to Congress that successfully argued against that use of g-fees. We warned it would shift a burden to homeowners and the housing sector in a manner that prevents the government-sponsored entities from effectively managing their risk and managing their duty to ensure that creditworthy borrowers from underserved communities has access to sustainable credit.

We expect final floor votes on this package later this week or early next week.