Last month, The Economic Growth, Regulatory Reform and Consumer Protection Act was advanced in the U.S. Senate with strong bipartisan support. This common-sense legislation will go a long way toward giving community financial institutions some needed relief from rules put in place to curb practices that credit unions and community financial institutions never engaged in. This legislation will help to push back against a regulatory climate that treats the biggest banks the same as community credit unions.
Some have pushed back on the bill, calling it another Wall Street bailout. These reactions could not be more off base, as the modest changes proposed in this bill don't do anything for the big banks. The changes will allow credit unions and other community financial institutions to more efficiently serve consumers with the products they need.
Among other things, the bill would:
• Make the process of getting a mortgage loan from a credit union easier, making homeownership a more achievable goal for 1.7 million Minnesota credit union members.
• Make common-sense adjustments to thresholds, freeing up resources while holding Wall Street accountable to federal regulators.
• Change the designation to certain types of real estate loans, which will free up capital and allow local credit unions to lend out to small businesses. This brings much-needed support to Main Street Minnesota.
Just as important is what the bill won't do. It won't make changes to the Consumer Financial Protection Bureau, and it won't change important provisions and laws aimed at abusers of consumers. Those will remain in place. Most importantly, it won't do anything to increase the risk to an economy still recovering from the financial crisis caused by Wall Street 10 years ago. Rather, this bill makes thoughtful, constructive, common-sense improvements to a well-intentioned law that is currently having the opposite of its intended effect.
Senators around the country from both parties have already put differences aside to introduce this bill and make a strong statement that it's time to get rid of the system that threatens families and puts credit unions and small banks out of business.
This bill is a cooperative and subtle approach to regulatory reform that will bring tangible benefits. I encourage community members to contact our Minnesota Senators now to urge them to support the Economic Growth, Regulatory Reform and Consumer Protection Act.
Charles (Chuck) Albrecht is CEO of Mid-Minnesota Federal Credit Union