House Financial Services Committee Chairman Jeb Hensarling (R-TX) released an overview last week of his plans to rewrite the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as “Dodd-Frank.” The text of the bill is forthcoming since Congress is out this week for the spring district work period.
As part of his plan, the chairman released a comparison of the items that made the cut for his “2.0 version” of the Financial Choice Act. While the California and Nevada Credit Union Leagues and the Credit Union National Association (CUNA) are awaiting the actual language before committing to a formal position, the concepts present some signs of relief while also creating some potential hazards, according to Jeremy Empol, vice president of federal government affairs for the Leagues.
Among those on the positive side are restrictions on the Unfair Deceptive or Abusive Acts and Practices (UDAAP) authority, which essentially allows the Consumer Financial Protection Bureau (CFPB) to apply the one-size-fits-all restrictions to every financial institution. Additionally, the CFPB would be relieved of its supervisory authority for credit unions $10 billion and above, and the charter for the CFPB would be switched to reflect an executive agency rather than an independent one, thus subjecting it to the congressional appropriations process.
The National Credit Union Administration (NCUA) would also be subjected to general appropriations, something CUNA and the Leagues caution against as this would allow political adversaries the opportunity to restrict credit unions and potentially mix the National Credit Union Share Insurance Fund (NCUSIF) with other funds. CUNA and the Leagues are expecting clarification language once the full text of the bill is released.
“This is the beginning of the legislative process and only the first of many steps to come,” Empol said. “The Leagues appreciate the advancement of legislation to finally begin the dialogue, and will keep our membership informed as the bill moves to hearing, mark-up, and eventually the floor.”
The House leadership has sent signals it is looking to pass a Dodd-Frank update before the Memorial Day recess, which commits this bill to a very fast path in the House. The Senate, however, has not indicated a timeline for its action.
“Consensus in the Senate, where 60 votes will be needed, is going to be much more difficult,” Empol said. “Senate Chairman Mike Crapo (R-ID) and Ranking Member Sherodd Brown (D-OH) have committed to a bi-partisan process and requested feedback from various industries. CUNA and the Leagues submitted a joint letter last week. They are seeking very specific experiences to seek what, if any, remedies can be sought by a consensus-driven process.”
Click here to access the Leagues’ new “Tell Your CFPB Story” web page, which is collecting examples from credit unions.
“The more testimonials about specific CFPB issues, the stronger our case for seeking remedies,” Empol said. “Please make sure to visit the above website to help the cause."