A top Republican on the House Financial Services Committee is preparing to introduce legislation meant to ease the regulatory burden on credit unions around the country.
Thanks in large part to the Dodd-Frank Wall Street reform law, financial regulators are busy churning out hundreds of new rules to prevent a repeat of the economic crisis of the late 2000s.
The forthcoming bill, being drafted by Rep. Gary Miller (R-Calif.), would create a distinction between community credit unions and big banks in the eyes of regulators.
“While I fully support effective federal regulation in the financial services sector, it is clear that credit unions did not contribute to the financial crisis,” said Miller, vice chairman of the Financial Services panel. “Accordingly, they shouldn't find themselves caught up in and threatened by a wave of regulation aimed at those that did.”
Miller, a builder and developer by trade, said credit unions play a vital role in lending to small businesses and families. But, he said, they face 5,000 pages of new federal regulations — and that’s just from the Consumer Financial Protection Bureau (CFPB), which was created by Dodd-Frank.
The rules threaten to stifle lending and hamper the country’s economic recovery, Miller said.
If enacted, the Miller bill would empower the primary regulator of credit unions, the National Credit Union Association (NCUA), to modify CFPB rules as they relate to credit unions, as long as the changes don’t block their objectives.
It would also authorize the NCUA to develop a separate credit union specific capital-system that better reflects those institutions’ risks, and update the investment option available to credit unions.
It was not immediately clear when Miller planned to introduce the measure.