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Senate 'Too Big To Fail' Bill Released
WASHINGTON (4/25/13)--Sens. Sherrod Brown (D-Ohio) and David Vitter (R-La.) on Wednesday introduced the Terminating Bailouts for Taxpayer Fairness Act (S. 798), which, in part, would impose stronger capital requirements on banks.

The bill would require the largest banks to maintain a capital ratio of at least 15%. Smaller banks would be subject to a lower threshold of between 8% and nearly 10%.

Credit Union National Association Vice President of Legislative Affairs Ryan Donovan said that if lawmakers address community bank capital standards, that action should be paired with legislation to address credit union capital issues, particularly the ability of credit unions to accept supplemental forms of capital.

The Brown-Vitter bill, however, does contain some provisions that would apply to credit unions as well as banks. For example, the privacy notification bill--which would eliminate repetitive privacy notices by eliminating a requirement that the notices be sent annually--has been included in this bill. It also includes the part of the examination fairness bill, creating an examination ombudsman for all the federal financial institution regulators.

The Brown-Vitter bill would also provide some relief with respect to the definition of a qualified mortgage. The legislation would also exempt financial institutions under $10 billion in assets from small business data collection requirements under the Equal Credit Opportunity Act.

Proir to the bill's introduction, CUNA President/CEO Bill Cheney told The Hill newspaper in an interview that  "the people in the positions who made the decisions to bail out the big banks before would probably have to do the same thing today"  barring any changes to the law.  He added, "I think too big to fail still exists."

Cheney also told the publication that many rules out of regulatory agencies like the Consumer Financial Protection Bureau (CFPB) are unduly burdening credit unions instead of major banks and predatory lenders.

CUNA has presented a 35-point plan to Congress recommending regulatory relief measure for credit unions, which includes a proposal to permit credit unions accept supplemental forms of capital consistent with the cooperative principles.
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