Analysis looks at CHOICE impact for state system

May 16, 2017 -- A detailed analysis of the impact on the state credit union system – in particular, the effect on NCUA, the CFPB and credit unions – is outlined in a new summary of the Financial CHOICE Act by NASCUS. The analysis is available to NASCUS members only.

The Financial CHOICE Act, H.R. 10 – passed by the House Financial Services Committee two weeks ago and sent to the House floor – is sweeping legislation largely aimed at dismantling the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and offering overall reform of the federal financial regulatory structure. It includes a number of NASCUS-supported provisions, including: more transparency in the NCUA budgeting process (including through public hearings), and for the overhead transfer rate (OTR).

The bill also contains a so-called “off-ramp” provision that would allow financial institutions, including credit unions, which maintain an average leverage ratio of at least 10% the option to be exempt from federal capital and liquidity requirements. The institutions, if they apply for the exemption and receive it, would be defined as “qualifying banking organizations” (QBOs) in the CHOICE Act.

The six-page NASCUS analysis looks closely at the impact of the bill (which itself is nearly 600 pages long) on NCUA, the CPFB and credit unions generally, including: Bringing NCUA and CFPB into the regular Congressional appropriations process; budget and National Credit Union Share Insurance Fund transparency at NCUA; changing the scope (and name) of the CFPB; removal of the bureau’s “unfair, deceptive or abusive acts or practices (UDAAP)” authority and returning preservation of  “unfair or deceptive acts or practices” (UDAP), to federal banking regulators, and more.

H.R. 10 is expected to be considered on the House floor by the end of May.

NASCUS analysis/summary of H.R. 10, the Financial Choice Act (members only)