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CUNA details new bill bank thrift provisions
WASHINGTON (6/23/08)—A new House bill that, in part, addresses aspects of member business lending (MBL) and field of membership issues for credit unions also contains relief provisions for banks and thrifts. For instance, H.R. 6312, the Credit Union, Bank and Thrift Regulatory Relief Act of 2008, would remove the current thrift caps on auto and business lending. For commercial banks it would, most notably, authorize the payment of interest on reserves by a federal reserve bank at least quarterly on balances maintained there on behalf of a depository institution. It proposes to allow banks to pay interest on business checking accounts. Just as the credit union provision of the newly introduced legislation were based on the Credit Union Regulatory Relief Act (CURRA), the bank and thrift provisions also were based on a currently pending bill, the Bank and Thrift Regulatory Relief Act of 2008 (H.R. 5841), introduced in April. Left behind from that bill, however, were sections that would have allowed banks and thrifts to reorganize more easily as LLC or Subchapter S organizations (Section 101, 102 and 206 of H.R. 5841). CUNA Vice President of Legislative Affairs Ryan Donovan Friday noted many may recall when CUNA opposed removing the business lending cap for thrifts during House-Senate negotiation of the Financial Services Regulatory Relief Act of 2006. However, he said, the situation in 2008 is different. "That time, the package of provisions was incredibly unbalanced. This time, to achieve a balanced bill, the banks lost LLC and Subchapter S flexibility, which in the long run is probably more important to them. "But for credit unions, I think the important part of the bill is not what the banks got or didn't get, the important thing is to look at the relief that the bill provides credit unions. This is a good bill that includes the underserved areas FOM provision and member business lending relief." Some provisions of the new regulatory relief measure, introduced late Thursday by Reps. Paul Kanjorski (D-Penn.), Ed Royce (R-Calif.) and Dennis Moore (D-Kan.), benefit credit unions, as well as banks and thrifts. One example is the proposed change in Gramm-Leach-Bliley privacy notification requirements. Under this bill, financial institutions would not be required to send annual privacy notifications under certain circumstances if it has not changed its policies and practices with respect to disclosing nonpublic personal information since its last disclosure. For more details of the bill, use the resource link below.


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