WASHINGTON (3/23/15)--CUNA President/CEO Jim Nussle has written to several members of the U.S. Congress to express CUNA's support for two pieces of regulatory relief legislation introduced last week.

The Credit Union Residential Loan Parity Act (H.R. 1422) was introduced March 17 by Reps. Ed Royce (R-Calif.) and Jared Huffman (D-Calif.). It would amend the Federal Credit Union Act to exempt credit union loans to purchase a one-to-four unit, non-owner occupied residential dwelling from the 12.25% cap on member business lending.

Currently, those loans are classified as business loans for credit unions, while they are classified as residential real estate loans for banks.

"Enactment of this legislation would not only correct this disparity but it would also enable credit unions to provide additional credit to borrowers seeking to purchase residential units, including low-income rental units," Nussle wrote. "Credit unions would be better able to meet the needs of their members, if this bill was enacted, and it would also contribute to the availability of affordable rental housing."

The bill would also authorize the National Credit Union Administration to apply strict underwriting and servicing requirements for the loans.

H.R. 1408, also introduced March 17 by Reps. Ed Perlmutter (D-Colo.) and Blaine Luetkemeyer (R-Mo.), contains a provision that directs the federal banking agencies to conduct a study of appropriate capital requirements for mortgage servicing assets for nonsystemic banking institutions.

The NCUA's risk-based capital proposal places higher risk weightings on mortgage servicing assets.

"CUNA strongly believes nothing should be done by regulation that would negatively impact the relationship between a credit union and their member-owners," Nussle wrote. "Unnecessarily high risk weightings on mortgage servicing assets could potentially make mortgages more costly to the consumer or disadvantageous to the credit union to pursue these services."