Regulatory Relief Bill Passes Senate

Giving Communities a Boost & Protecting Consumers, Veterans, Students

U.S. Senator Murkowski (R-AK) today voted for S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, legislation that measures good practices and fair treatment of banking institution customers and rolls back many burdensome Dodd-Frank provisions that had unintended consequences for consumers, home-buyers, and small business owners.

“I have heard from many local lending institutions and they are excited about the regulatory relief measures for community and regional financial institutions. Rather than having to put in hundreds of man-hours to insure they’re in compliance with the burdensome regulations imposed by the Dodd-Frank Act, they can get to the business of helping their communities grow by giving loans to start small businesses or to purchase a family home. This legislation will bring much-needed relief to numerous community, local, and regional financial institutions throughout the nation, as well as provide access to capital for our entrepreneurs and businesses, leading to job creation and overall economic growth. Let’s get our financial institutions back to the business of staying connected and spurring investment in our communities. The strong bipartisan vote today is a reflection of the good work of many of my Senate colleagues on the Banking Committee.”

Bill Highlights:

  • Credit Union Residential Loans: Includes legislation of Senator Murkowski which enables more loans to be offered to members from small to mid-size credit unions by classifying non-owner-occupied one-to-four unit family residences as residential loans under the Federal Credit Union Act. This will free up credit unions funds enabling them to make more loans to small businesses.
  • Rural Exemptions: Takes into account the distances and difficulties in getting appraisers to rural areas by exempting homes under $400,000 in rural areas from obtaining an appraisal, as outlined in Dodd-Frank. This will significantly lower the overall cost and time of buying a home that otherwise would have been subject to such a regulation.
  • Home Mortgage Disclosure Improvements: The goal of the Home Mortgage Disclosure Act is laudable. Anyone with the financial capability should be able to buy a home without the influence of racial bias. However, HMDA reporting requirements are incredibly burdensome. For a mid-size credit union that closes less than 500 mortgage loans each year, the statistical analysis of loan closings is not large enough to detect any trends in discriminatory behavior.  Additionally, credit unions are closely monitored by the National Credit Union Administration on member issues, so any discriminatory behavior can be identified and addressed more effectively already.
  • Student Borrowers Protections: Removes private loan default from a credit report if the financial institution offers and the borrower satisfies loan rehabilitation that includes consecutive on-time monthly payments sufficient to the lender as evidence of willingness and ability to repay. Prohibits lenders from declaring a student loan in default or accelerating the loan solely because a cosigner died or declared bankruptcy. Also directs the Financial Literacy and Education Commission to establish best practices for institutions of higher learning to teach financial literacy skills.
  • Protecting Consumers: Reduces identity fraud by combatting “synthetic identity fraud” by requiring the Social Security commissioner to create a database containing people’s names of birth, social security, and name for use in responding to identity-verification queries by users.
  • Protecting Veterans: Protects veterans from predatory lending, by setting out new timing, fee, and disclosure requirements for refinancing home loans guaranteed by the Department of Veterans Affairs. Requires credit bureaus to provide free credit monitoring to active-duty military servicemembers.
  • Supporting Innovators: Removes outdated regulations and replaces a regulatory framework that will encourage the growth of innovative forms of capital formation, which help businesses grow and create jobs.  

The bill passed in a vote of 67-31 and now heads to the House of Representatives. 

“Provisions in this bill would ease mortgage lending and free up capital for small businesses, two essential ways to grow the Alaska economy.  As a member-owned cooperative any increased cost of compliance is borne by our members through a lower value transfer on savings, loans and fees.  S.2155 is a fair and balanced approach to regulatory relief for the Main Street financial institutions that were there to help consumers during the economic crisis with reliable and trust worthy products and services. – Alaska USA Federal Credit Union President and CEO, Geoff Lundfelt, Anchorage, AK

“We have seen a sizeable increase over the past year in the financial exploitation of senior citizens.  Steps are taken to identify high risk accounts such as these, as well as educate our members.  Any relief for credit unions on that topic, including legal immunity for our employees, is greatly appreciated and helps us to do a better job of protecting our members from financial predators.” – ALPS Federal Credit Union Interim CEO, Sandi Riggs, Sitka, AK