WASHINGTON (5/21/15)--Sen. Richard Shelby’s (R-Ala.) regulatory relief bill is scheduled to be marked up by the Senate Banking Committee today.
The bill contains a number of credit union-friendly and credit union-specific regulatory relief provisions, many of which CUNA has testified and written in support of before the bill was introduced.
“CUNA and the leagues are advocating for both sides to negotiate, even after the markup concludes, so that a bipartisan agreement can be reached ensuring much-needed regulatory relief will pass the Senate,” said Sam Whitfield, CUNA’s deputy chief advocacy officer, echoing a point CUNA and its partners made in a letter to the committee last week.
Sen. Sherrod Brown (D-Ohio), ranking member of the committee, proposed an alternate version of the bill this week. Brown’s version would provide qualified mortgage liability protection for portfolio loans that would meet certain conditions and limiting the size of the institution to under $10 billion in assets; streamline privacy notifications; and allow privately insured credit unions to join the Federal Home Loan Bank program.
It is widely assumed that all 10 Democrats on the Banking Committee will vote in block for Brown’s alternative, while the Republicans on the panel support Shelby's plan.
The committee issued a “Myths and Realities” document this week, acknowledging some confusion about the focus of several provisions in Shelby’s bill.
The document specifies that while Shelby’s bill would allow mortgages held in portfolio to be classified as qualified mortgages, those loans would be a new category of qualified mortgages which contains a number of consumer protections and safety and soundness requirements, including a requirement that the creditor hold 100% of the risk.
Shelby’s bill also contains provisions that would make several changes in government-sponsored enterprises Fannie Mae and Freddie Mac. The changes would reduce taxpayer risk posed by the federal conservatorship of the entities and allow for private capital to play a bigger role.