The Senate Banking Committee announced on November 16th an agreement on a bipartisan regulatory reform package to make changes to Dodd-Frank provisions and relieve compliance burdens felt at financial institutions. This bill, S. 2155, is the work of years of negotiations on the Senate side, with many hours of advocacy from credit unions, Leagues and CUNA between Hike the Hill visits, work with the Senate Banking Committee last spring for legislative proposals, and engagement in the series of hearings the committee has held. With the introduction of the bill, it could lead to some real regulatory reform for credit unions! For a section-by-section summary, please click here.
The bill has been heralded as a relief proposal for credit unions and small to mid-sized banks that have been under strict post-crisis rules, and is intended to expand consumer access to mortgages, reduce regulations and create a safe harbor for those who report suspected elder abuse, but also limit credit report data collection – something of note in the post-Equifax breach era. In addition, there is a provision in the current bill that would grant credit unions parity with banks by classifying residential loans on one- to four-unit, non-owner-occupied properties as real estate loans (and not business loans at they are today).
While the premise of this Dodd Act Reform bill will still be opposed by some in the Senate, it is considered by political insiders to have the votes necessary to pass at the moment. Special thanks to U.S. Senator David Perdue (R) from Georgia being one of the original sponsors, and to all the credit unions from Georgia who have engaged his office on the importance of regulatory relief for the industry.
And while the U.S. House passed its Dodd Act Reform proposal back in June, work has continued to push the House for credit union regulatory relief. Of note, the House Financial Services Committee passed three bills to provide credit unions some desired changes on November 15th:
- The Mortgage Choice Act of 2017 (H.R. 1153) to exclude title insurance charges and escrowed homeowners’ insurance premiums from the points and fees calculation;
- The Securing Access to Affordable Mortgages Act (H.R. 3221) to provide an exemption from the Truth in Lending Act appraisal requirements for properties of $250,000 or less for loans held on portfolio for at least three years; and
- The TRID Improvement Act of 2017 (H.R. 3978) to amend the Real Estate Settlement Procedures Act to require the Consumer Financial Protection Bureau to allow the accurate disclosure of title insurance premiums and any potential discounts to homebuyers.
Credit unions have been pushing for regulatory relief in their in-district visits with legislators, at their D.C. Hike the Hill communications with Congress and key staff, and through CUNA’s Campaign for Common-Sense Regulation.
