The Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) is poised to ease regulations on community-based financial institutions, CUNA President/CEO Jim Nussle wrote for Fox Business Wednesday. The House passed the bipartisan, CUNA-backed regulatory relief bill Tuesday, and President Donald Trump is expected to sign it into law in the coming days.
“Years of deliberation, hearings, markups and floor votes in the House inspired and prompted the Senate to craft and ultimately pass S. 2155. As a result, it’s effectively a bicameral bill; the House deserves credit for laying the groundwork for S. 2155,” Nussle wrote. “With the House formally green-lighting S. 2155 – we are on the path to easing the regulatory burden on the lenders that power so much of America's economy.”
Nussle highlighted how, in the wake of the economic recession, the Dodd-Frank Act proved costly for community financial institutions like credit unions.
“in mid-2009, at the peak of the crisis, just 2% of credit union loans were delinquent. That’s less than one-fourth as many bad loans as the banks had on their books. Regulations are eating up one of every six dollars credit unions spend on operations each year – or $6.1 billion in total,” Nussle wrote. “Some smaller financial institutions have been unable to shoulder these additional costs.”
S. 2155 will allow credit unions to divert spending away from regulatory compliance and toward their members, Nussle said. The provision granting parity with banks for certain types of real estate loans will free up an additional $4 billion alone in additional capital for small businesses.
“Crucially, the bill doesn’t touch restrictions on huge Wall Street banks – the ones that actually pose a systemic risk to the economy – or interfere with regulatory agencies like the Consumer Financial Protection Bureau,” Nussle noted.