June 23, 2006

Honorable Richard C. Shelby
Chairman
Committee on Banking, Housing and Urban Affairs
United State Senate
Washington, DC 20510

Honorable Paul S. Sarbanes
Ranking Member
Committee on Banking, Housing and Urban Affairs
United States Senate
Washington, DC 20510

Honorable Mike Crapo
Chairman
Subcommittee on International Trade and Finance
United States Senate
Washington, DC 20510

Dear Senators:

Thank you for leading the Senate’s efforts to provide regulatory relief for all financial institutions through adoption of the Financial Services Regulatory Relief Act of 2006 (S. 2856). We are strongly supportive of the final passage of this legislation. However, we are compelled to write in response to a letter from the Credit Union National Association (CUNA), which has introduced a last-minute, unnecessary element of contentiousness into the process of resolving the differences between the House and Senate regulatory relief bills.

Both the Senate- and the House-passed regulatory relief bills are carefully balanced to provide relief to the various charter types operating under different statutory authorities. We trust that the Committee will maintain its cooperative, bipartisan approach in its final considerations.

While the bills have great similarity, the House bill contains a greater number of provisions. Therefore, we believe it is appropriate that the House suggest inclusion of certain limited provisions from its bill. We understand that this is occurring and that a House offer was designed to maintain the balance characteristic of both bills by adding provisions for every charter type, including the credit union charter. We also understand that only provisions in either the Senate or House bills are under consideration.

At the eleventh hour, CUNA is objecting to a provision on community business lending that has been included continuously by the House bill for the past three Congresses. Most recently, the House passed H.R. 3505 by a vote of 415 to 2, without objection from CUNA. We are disappointed that CUNA, which had previously endorsed H.R. 3505, is now changing course and attacking regulatory relief for other charter types.

ACB continues to strongly support easing restrictions on community business lending conducted by savings associations as contained in the House bill, and note that this is fully consistent with longstanding statutory authority that includes small business lending as part of the Qualified Thrift Lender test for savings associations. CUNA has no similar case to make, and the expansion of credit unions’ commercial lending authority was not included in either bill.

We ask that you disregard this last-minute, erroneous letter from CUNA as you continue your deliberations. We stand ready to assist the Committee in any way we can to support a positive legislative result that reduces unnecessary restrictions and burdens on financial institutions.

Sincerely

Diane Casey-Landry