The Economic Growth, Regulatory Relief and Consumer Protection Act, would provide much-needed regulatory relief for credit unions and banks and lower the cost of borrowing for thousands of Indiana businesses, Kevin Ryan, president/CEO Financial Center First CU, Indianapolis, wrote in an op-ed that appeared in the Indy Star.
Ryan praised Sen. Joe Donnelly (D-Ind.) for helping craft S. 2155, which was introduced in November, and passed the Senate Banking Committee in December.
It contains a credit union-specific provision to exempt one-to-four unit, non-owner occupied residential loans from a credit union’s member business lending cap, freeing up to as much as $4 billion in additional capital.
Other provisions would:
“The legislation … would exempt banks and credit unions with less than $250 billion in assets from the stiffest of Dodd-Frank's regulations,” Ryan wrote. “In addition, the bill would relax regulations on mortgage lending at credit unions, simplify the lending process for consumers, and free up about $4 billion in additional capital for credit unions to lend to small businesses.”
Ryan also noted that the bill would significantly reduce lenders’ compliance costs. He noted that Indiana is home to 154 credit unions with 2.4 million members. On average, credit unions spend almost $1 million each complying with regulations.
“Credit unions and community banks across the state play a vital role in helping provide small businesses the resources to grow and create jobs,” Ryan said. “With a lower compliance burden, these Main Street lenders could offer affordable financing to more small businesses across the state.”
The Senate Banking Committee approved the bill in a 16-7 vote, with 12 Republicans and four Democrats voting in favor. The Senate must still approve the legislation.
“In our highly polarized political climate, that would be quite an achievement and we appreciate Donnelly’s leadership,” Ryan wrote. “Let's hope Donnelly and his colleagues in both parties can shepherd the bill over the finish line. Indiana's small businesses are counting on them.”