Hearing set for fin. reg reform -- CHOICE 2.0 -- in House
April 20, 2017 -- A House hearing to consider the latest version of financial regulatory reform legislation – a draft of which was released publicly Wednesday -- has been scheduled for next week by Financial Services Committee Chairman Jeb Hensarling, R-Texas.
Known as the Financial CHOICE Act 2.0 (the second version of the “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs,” the first version having debuted last summer), the nearly 600-page draft bill includes several sections and provisions related to NCUA. Those include bringing the agency under the congressional appropriations proces. providing transparency for the Overhead Transfer Rate (OTR) and requiring an annual public hearing on the agency’s proposed budget.
However, unlike last year’s version – which would have expanded the NCUA Board from three members to five -- the latest makes no changes to the make-up of the agency board. NASCUS has supported the board expansion, and stated so in a letter to the chairman early this year. NASCUS President and CEO Lucy Ito has said that the association will continue to urge expansion the board – including designating one member of the board for an individual with experience as a state credit union regulator – through the legislative process.
In a release, Hensarling stated that Republicans are eager to work with President Donald Trump to use the Financial CHOICE Act as a replacement for the “mistake” of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. “We will work with President Trump to follow through on his promise to dismantle Dodd-Frank,” he stated. “Dodd-Frank’s one-size-fits-all regulations treat all financial institutions the same, regardless of their size,” he stated. “That makes no sense and hurts smaller, hometown banks and credit unions that did nothing to cause the last financial crisis.”
The hearing is scheduled for Wednesday (April 26) at 10 a.m.
Other provisions in the bill would:
- Require that resources from the National Credit Union Share Insurance Fund (NCUSIF) used for the agency’s annual budget – such as the overhead transfer rate (OTR) -- be detailed in an individual report. The report would contain a detailed analysis of how the expenses of the agency are assigned between “prudential activities and insurance-related activities” and the extent to which the expenses are paid from the fees collected from federal credit union operating fees, or from the NCUSIF through the OTR. Additionally, the agency must include a “supporting rationale” for any proposed use of NCUSIF funding in its budget, “including detailed breakdowns and supporting rationales for any such proposed use” and make the report available to the public.
- Bring NCUA, along with other federal financial regulatory agencies,under the congressional appropriations process under provisions of the proposed Financial CHOICE Act 2.0, details of which were released this week. The credit union agency, along with the Federal Deposit Insurance Corp. (FDIC), Office of the Comptroller of the Currency (OCC) and the “non-monetary policy related functions of the Board of Governors of the Federal Reserve System,” would all be required to have funding for their operations reviewed and approved by Congress before spending any dollars on agency programs. However, the agencies (where required) would still be responsible for collecting, through assessment and fees, the funds to cover their operations.