Removing Barriers Blog

Letter Supports 2017 House Appropriations FSGG Bill
Posted June 08, 2016 by Chandler Schuette

Today, we sent a letter the House, supporting the Financial Services and General Government (FSGG) appropriations bill for fiscal year 2017, which we believe would reduce the regulatory burden on credit unions. We wrote to the House Appropriations Committee and House Appropriations subcommittee on FSGG, prior to a markup of the bill scheduled for Thursday.

The committee report includes language that urges the CFPB to consider the impact its rules have on small financial institutions. The CFPB has explicit power in section 1022 of the Dodd-Frank Act to tailor its regulations to exempt any class of entity from individual rulemakings.

Reps. Steve Stivers (R-Ohio) and Adam Schiff (D-Calif.)  circulated a letter earlier this year that, with efforts by CUNA, state leagues and credit unions, was signed by 329 lawmakers. The letter called for the CFPB to use its power under section 1022 to protect credit unions from regulatory burden.

The bill also contains CUNA-backed provisions that would change the leadership structure of the CFPB to a 5-person commission and move the CFPB under the appropriations process.

The legislation would also require the bureau to study the use of arbitration prior to issuing any new regulations. This would affect the bureau’s recent proposal on arbitration, which we believe is inappropriate for member-owned, not-for-profit cooperative credit unions.

The bill also contains funding of key programs that assist low-income credit unions that serve underserved areas and members of modest means, including

  • Maintaining the annual $2 million for the NCUA’s Community Development Revolving Loan Fund, which provides grants and loans to low-income designated credit unions; and
  • Increasing the funding to $250 million for the U.S. Treasury’s Community Development Financial Institutions (CDFI)Fund, which awards funds to certified CDFIs, including the 276 credit unions certified as of April 30.

The bill also maintains funding for the two Small Business Administration (SBA)programs that are crucial to credit unions:

  • $28.5 billion for the SBA’s 7(a) program, which allows the government to guarantee up to 85% of loans, with the guaranteed portion not counting against credit unions’ cap on member business lending; and
  • $7.5 billion for the SBA’s 504 loan program, which is used for long-term, fixed-rate financing on major fixed assets, such as equipment and real estate.

The letter was sent to Reps. Hal Rogers (R-Ky.) and Nita Lowey (D-N.Y.), chair and ranking member of the House Appropriations Committee, and Reps. Ander Crenshaw (R-Fla.) and Jose Serrano (D-N.Y.), chair and ranking member of the House Appropriations FSGG subcommittee.