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News Now

Washington
With Congress return reg revamp debate heats up
WASHINGTON (9/9/09)--Congress came back to Washington this week and lawmakers face a full slate of legislative activity at the start of this eight-week legislative work period, including a hearing on Community Reinvestment Act issues, perhaps as early as next week. While the upcoming eight-week legislative period is expected to end on Oct. 30, there is speculation that work on Capitol Hill could continue beyond that deadline. Rep. Barney Frank (D-Mass.) recently stated that larger financial regulatory reforms could be passed by the House by October, with President Barack Obama signing the completed legislation by the end of this year. The House Financial Services Committee, which is chaired by Frank, today will open business with a hearing on the progress of the Obama administration’s “Making Home Affordable Program.” There are a number of other issues that are of great importance to credit unions on the legislative calendar, but one of the first credit union-specific pieces of legislation should be the simplest of all, as the House this week is expected to discuss H. Res. 556, which recognizes the 75th anniversary of the enactment of the Federal Credit Union Act. "This resolution not only recognizes the anniversary of the Act, but also the valuable service all credit unions provide their members as well as the economic stimulus credit unions are providing during the financial crisis," said Ryan Donovan, vice president of legislative affairs. It is also thought that the committee may soon mark up H.R. 3216, the Consumer Financial Protection Agency (CFPA) Act. This legislation would seek to protect consumers of financial products through the creation of a powerful independent agency with extensive rulemaking, oversight, and enforcement tools. Debate and markup of this legislation was scheduled to occur before the recently ended summer district work period, but other business prevented the Committee from taking any action at that time. Member business lending (MBL) is another important issue for credit unions, and Reps. Paul Kanjorski (D-Pa.) and Ed Royce (R-Calif.) in late July introduced legislation that would double the current statutory MBL cap of 12.25%, a move that CUNA believes could produce as much as $10 billion in new capital for investment in the first year of the change. The Credit Union National Association (CUNA), the National Credit Union Administration, and member credit unions continue to explore a legislative remedy addressing the unintended consequences of the 21-day rule in the recently enacted Credit Card Accountability, Responsibility, and Disclosure (CARD) Act. Legislation addressing interchange fees is not expected to be brought up during the fall session, but related measures were introduced on both the House and Senate sides in early summer, and similar legislation could be brought up during discussion of the CFPA. One such bill introduced by Rep. John Conyers (D-Mich.) would allow merchants to negotiate interchange with card issuers. However, federally chartered credit unions and all financial institutions with less than $1 billion in assets are exempted from the terms of the bill. Another bill from Sen. Richard Durbin (D-Ill.) would also provide for these sorts of negotiations. National convenience retailers Circle-K and 7-11 have circulated and are expected to present petitions claiming that consumers support their position on interchange, but CUNA’s Federal Legislative Affairs Director Michele Johnson has countered that argument, saying that changes to the current interchange fee structure would “give merchants an antitrust advantage in negotiations with card issuers, networks, and other payment system participants.”


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