Removing Barriers Blog

House Budget Resolution Contains Several Regulatory Relief Provisions
Posted March 18, 2016 by CUNA Advocacy

Late Wednesday evening, the House Budget Committee approved the Fiscal Year 2017 Budget Resolution. It is expected to be considered by the full House of Representatives in the near future. The budget is a broad framework and doesn't detail the amounts to be spent by each and every federal program and agency. Rather, it sets overall spending limits and includes policy statements that it expects the authorizing committees in Congress to consider. Several such policy statements that passed on Wednesday, are of interest to credit unions.

Relevant policy statements include:

• Repeal of the Consumer Financial Protection Bureau . The Committee stated that, "the CFPB operates off-budget with little oversight from Congress or the American people. It has an irresponsible level of authority to write far-reaching rules that have the potential to negatively affect access to credit for millions of Americans."

• Elimination of Fannie Mae and Freddie Mac. The Committee report states that, "taxpayers remain exposed to more than $5 trillion in outstanding commitments by these two government-sponsored enterprises. This budget envisions the eventual elimination of the mortgage giants by calling for the privatization of their operations and an end to their government guarantee and taxpayer subsidies."

• Use of fair value accounting principles to gain a better understanding of the Federal Housing Authority financial health. The Committee concludes that, "taxpayers face another potential bailout with the Federal Housing Authority (FHA). For seven years, FHA could not meet its congressionally mandated 2 percent capital ratio, which is needed to protect taxpayers against potential mortgage losses. Today, FHA insures more than 7.6 million loans with an outstanding principal balance exceeding $1.1 trillion."

• Reform of the federal tax code. The Committee stated that, "Tax reform should curb or eliminate loopholes and use those savings to lower tax rates across the board, not to fund more wasteful Government spending." CUNA and its system partners will continue to educate Members of Congress and their staffs on the importance of the federal credit union tax status.

•Prohibition on the use of Fannie Mae and Freddie Mac guarantee fees to offset unrelated federal spending. This is a position that CUNA has long advocated. Guarantee fees paid by mortgage lenders, like credit unions, should not be used to fund unrelated government spending. Such transfers make housing more expensive for credit union members.

• Mandating certain committees in Congress to produce $140 billion in new revenue and savings to reduce the federal budget deficit. This is a mandate that CUNA recognizes could pose a threat to the credit union tax status. As Congressional Committees seek ways to come up with this large amount of savings, CUNA will continue to remind lawmakers that squeezing credit unions would be counterproductive to their efforts and would have an immensely adverse effect on over 100 million American credit union members.