Last week ushered in a big legislative win for credit unions on Capitol Hill. Following a major industry push to reverse restrictions that Dodd-Frank legislation placed on credit unions after the 2008 financial crisis, the “Economic Growth, Regulatory Relief and Consumer Protection Act,” better known as S. 2155, was passed by Congress and signed into law by President Donald Trump. The new legislation is a first step towards providing relief to smaller banks and credit unions from what some would call costly and burdensome rules.
The new law raises the threshold for which a bank can be considered too big to fail from $50 billion to $250 billion, easing restrictions and Federal Reserve Board oversight for smaller banks. In addition, it also introduces a number of new rules around lending and consumer protections (see the full list of rules introduced by S. 2155).
What S. 2155 Means for Credit Unions
“We lose about a credit union a day, and it’s mostly because of the regulatory burden,” said Dan Berger, CEO of the National Association of Federal Credit Unions. The hope is that this new law will enable credit unions to focus more on their business instead of diverting capital and resources to satisfying regulatory requirements.
Jim Hanisch, President of CO-OP Network added, “S. 2155 is a game changer for credit unions. The rollback of these regulations will translate into a breadth of new revenue opportunities for credit unions. More importantly, it will ensure financial access to millions of people who otherwise would have been shut out of the American Dream.”
A Collaborative Effort
All told, more than 5,000 credit union leaders met with their legislators to build Congressional support for S. 2155. If ever there was an example of the collective power of the credit union movement, it is the passage of this historic legislation.
Credit Union National Association President/CEO Jim Nussle stated, “CUNA, state credit union leagues, credit unions and credit union members all deserve a major round of applause for getting this historic bill through Congress and onto the President’s desk.”
“We express much gratitude to everyone in our CO-OP community who helped bring this much-needed legislation to the table – and who championed the needs and rights of members in keeping with our movement’s ‘people helping people’ mission,” added Hanisch.
Complete details on the Economic Growth, Regulatory Relief and Consumer Protection Act, including a checklist of benefits the new legislation brings to credit unions, are published on the CUNA website.
While S. 2155 was a huge win for credit unions, more work needs to be done at the legislative level. We encourage our credit union partners to continue the conversation at our Co-Creation Councils as together we aim to drive our movement forward.
And, don’t forget to join us at our upcoming CO-OP Roadshows where we’ll be discussing strategies credit unions can take to digitally transform their business.