House Financial Services markup covers legislation to provide credit unions relief
Calling attention to efforts to provide regulatory relief to the credit union industry, America’s Credit Unions President/CEO Jim Nussle sent a letter to the House Financial Services Committee ahead of a markup session this week featuring bills designed to ease regulatory burdens. In his letter to the Committee, Nussle shared thoughts on several measures that the Committee is expected to vote on today including:
The Fair Audits and Inspections for Regulators Exams (FAIR) Act (H.R. 940) would ensure that federal financial institution regulators conduct fair examinations for those they supervise. The legislation would amend the Federal Financial Institutions Examinations Council (FFIEC) Act to authorize financial institutions to seek a prompt, independent review of a “Material Supervisory Determination” (MSD) from a regulatory examination.
The Financial Integrity and Regulation Management (FIRM) Act (H.R. 2702) removes the practice of “reputational risk” as a criteria for examiners as a component of supervision of depository institutions. “Reputational risk” currently allows examiners to apply ambiguous, non-quantifiable standards that may shift based on the current political or public opinion trends at the time. Removing this criteria promotes consistent, clear, safety-and-soundness focused regulation which helps ensure federal agencies stay within their statutory authority.
The Financial Institution Regulatory Tailoring Enhancement Act (H.R. 3230) increases the asset threshold to $50 billion (from the current $10 billion) for financial institutions to be subject to several regulatory requirements. The bill also includes CFPB supervision and qualified mortgage standards under the Truth in Lending Act. Raising the asset threshold as proposed would provide regulatory breathing room for large credit unions. Appropriately tailored regulation would allow credit unions to focus on their core mission of serving their members without burdensome regulations that are disproportionate to their activities.
The Halting Uncertain Methods and Practices in Supervision (HUMPS) Act of 2025 (H.R. 3379) requires the FFIEC to develop formal recommendations to ensure the CAMELS rating system is appropriately focused on institutions’ financial condition. The goal of this legislation is to establish quantifiable and objective criteria to best reflect actual risk. Nussle noted how Credit unions have supported a more objective management component of the CAMELS rating system but do not believe that it should be eliminated entirely.
The Taking Account of Institutions with Low Operating Risk (TAILOR) Act of 2025 (H.R. 3380) ensures that financial regulators like the NCUA do not regulate with a one-size-fits-all approach, by considering additional factors like risk profiles and institutions' business models. The bill specifically requires the NCUA to consider the aggregate impact that new rules pose to institutions in context with existing regulations. The letter also recommended that Congress expands Section 4 of the bill, which currently includes a report to Congress on the modernization of bank supervision, to include the NCUA.
The Committee started the two-day markup yesterday with consideration of a host of other bills and is expected to complete its work with discussion of these measures today. America’s Credit Unions will continue to remain engaged with the markup and report any developments.