Capital Corner: Housing Bill Gives DCUC Another Opportunity to Push CU Reforms

Congressional passage of bipartisan housing legislation, by overwhelming margins in both chambers, paves the way for a House-Senate conference that could produce a final bill that includes DCUC-backed credit union regulatory relief items.

Housing reform is a priority in both chambers. The House bill moved first and was the product of negotiations between Reps. French Hill (R-AR) and Maxine Waters (D-CA). A similar effort took place in the Senate, where Senate Banking Committee Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) have crafted their version.

Taken together, these bills suggest a broader effort that is considered to have, in the words of a key House aide, “a legitimate shot to become the banking bill that actually makes it to the President’s desk.”

The House bill was approved February 9 by a 390-9 margin, suggesting a serious effort that can become law. In addition to including a variety of reforms to HUD and Federal Reserve programs intended to streamline the federal presence in housing creation and supply, the bill was modified at the last minute to include the Credit Union Board Modernization Act, which updates rules governing federal credit union boards meetings. This measure allows federally chartered credit unions to meet six times annually, and grants credit unions additional operational flexibility, easier governance, and reduced administrative overhead without compromising oversight.

Also, Chairman Hill included the TAILOR Act, legislation aimed at streamlining the NCUA safety and soundness exam process, reducing compliance burdens, and providing for limited oversight in cases of well-managed, well-capitalized institutions. Following House passage a Financial Services Committee aide told DCUC representatives that these provisions represented an effort by Chairman Hill to add negotiating leverage to his bill. “We want a broader scope, more chips to bargain with when we eventually sit down with the Senate,” noted the staffer.

The Senate moved their package by an 84-6 margin in early March. While it also reforms the federal housing footprint, it differs from the House version in the creation of new government programs aimed at low-income and veteran communities. Also, the Senate bill does not contain the credit union-supported language, but it does incorporate a ban on institutional investor-owned single-family homes. This provision, called for by President Trump and supported by key Senators, is facing skepticism in the House.

Because these bills were balanced with input from Democrats in both chambers, changing provisions is expected to be difficult. Senate Democratic staff caution that Warren “is not keen on the House approach…in fact she thinks it turns a housing bill into a regulatory giveaway. That’s not going to fly.”

Proponents of the House version can point to political momentum generated by broadening the scope of that measure. DCUC and others have been active in pursuing reg relief items and is preparing additional items for inclusion in a final bill, such as Central Liquidity Facility and credit union loan maturity updates.

Regardless of how this process unfolds, expect housing reform legislation to occupy a prominent place on the agenda for the balance of the year, and DCUC is ready to continue its aggressive advocacy.