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Michigan Credit Union League Home » Information Services » Publications » News Articles  

Congress Passes Regulatory Reform Bill   (Monitor: July 19, 2010)

The U.S. Senate has passed the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act.  The Senate action clears the way for the legislation to be signed by President Obama.

The MCUL and CUNA, along with other leagues, have worked to minimize the extent to which this legislation adversely affects credit unions, particularly the interchange provision that was added to the bill by the Senate in May. Despite grassroots lobbying efforts, credit unions were unable to remove the interchange provision from the legislation, but were able to secure significant improvements. According to CUNA, the improvements will give credit unions "a better chance at convincing the Federal Reserve to set an interchange rate that would accurately reflect the true costs to credit unions."

Many of the other provisions will have no direct impact on credit unions; however, some, including the proposal to create the Bureau of Consumer Financial Protection, will affect credit unions. Over the course of the last year, credit union and association leaders have worked to ensure that when this legislation becomes law, the adverse impact on credit unions is minimized. The results, in large part due to credit union efforts, include:

• Credit unions with less than $10 billion in total assets will not be subject to examination and enforcement by the CFPB, except on a sampling basis or when significant consumer complaints have been reported.
• There is no "plain vanilla" product requirement.
• The deposit account data collection provision has been removed.
• Credit unions will not pay for the new consumer bureau.
• The legislation, thanks in very large part to our efforts, includes provisions directing the CFPB to take into consideration the impact of its regulations on credit unions and to identify and address outdated, unnecessary, and unduly burdensome regulation in an effort to reduce regulatory burden.
• The preemptive authorities of the Federal Credit Union Act remain unchanged.
• The Financial Stability Oversight Council, the group of banking regulators that have the authority to review, stay and set aside CFPB regulations, includes credit union representation.
• The CFPB has no authority to regulate the Community Reinvestment Act.

The legislation also includes provisions related to share insurance (making permanent the $250,000 insurance coverage level), remittances, and access to mainstream financial institutions that will present opportunity and challenges to credit unions.

More information will be availble in the coming days. Stay tuned to the MCUL website and Monitor for continuing updates and comments from the MCUL on the passage of regulatory reform.

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