A Congressional committee, made up of House and Senate members, drafted a new Highway and Transit bill that included a number of provisions to help credit unions. The League and CUNA worked hard to put the credit union issues in front of key lawmakers. Sen. Bill Nelson (D-FL) and Rep. Corrine Brown (D-FL) were on the committee. The League also reached out to Senate Banking Committee Chairman Richard Shelby (R-AL).
The new draft of the bill includes provisions to:
- Modernize privacy notification requirements to allow credit unions and all financial institutions to send notices only when there is a policy change, not on an annual basis
- Allow privately insured credit unions to become members of the Federal Home Loan Bank (FHLB) system
- Direct the CFPB to establish an application process allowing a person who lives in or does business in a state, to apply to the CFPB to have designated an area in which the business is located as a rural area for purposes of a federal consumer financial law
A designation of “rural” by the CFPB is important for credit unions, particularly to the type of products they may offer their members in these areas. Another provision includes the Ability-to-Repay and Qualified Mortgage (QM) standards under the TILA rule by which mortgage loans with balloon payments do not meet the QM standard. Like the escrow rule, small lenders that operate predominately in rural areas are eligible to originate balloon-payment QMs.
You can read a full analysis of the new draft on CUNA’s website.