House scraps measure to boost credit union regulator oversight

The House of Representatives on Wednesday night struck down a measure that would place the federal regulator for credit unions under tighter congressional control, earning praise from credit union trade groups.

The House removed language from a funding bill that would have placed the National Credit Union Administration (NCUA) under congressional appropriations. That measure would have given lawmakers control of the independent regulator’s budget, and was included in a bill to roll back much of the Dodd-Frank Act.

Lawmakers approved the change through an amendment offered by Reps. Mark Amodei (R-Nev.) and Pete Aguilar (D-Calif.).

{mosads}Groups representing credit unions praised the House for striking the language, calling the move a major win for the industry. Credit union advocates said that congressional interference could complicate the small firms’ close relationship with NCUA and give the regulator less control over stabilizing credit unions.

Credit unions have also expressed frustration with efforts to boost federal oversight of their operations after the financial crisis along with major banks, even though their activities are considered less risky. 

“The NCUA is an independent federal regulator funded by the nation’s federally-insured credit unions, and today’s amendment is important in preserving that independence,” said Dan Berger, president of the National Association of Federally-Insured Credit Unions (NAFCU).

“NAFCU and credit unions extend a heartfelt thanks to [Reps.] Amodei and Aguilar for standing up for the nation’s not-for-profit credit unions and the 110 million members they serve nationwide.”

Jim Nussle, president of the Credit Union National Association, called the decision “a huge victory for credit unions and their member-owners.”

“Placing NCUA under appropriations would be the functional equivalent of a hidden tax on credit unions and their members,” said Nussle, a former GOP congressman, House Budget Committee Chairman and director of the Office of Management and Budget.