[Congressional Record Volume 151, Number 63 (Friday, May 13, 2005)]
[Extensions of Remarks]
[Page E957]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E957]]



 IN SUPPORT OF H.R. 2317, THE CREDIT UNION REGULATORY IMPROVEMENTS ACT

                                 ______
                                 

                              HON. ED CASE

                               of hawaii

                    in the house of representatives

                         Thursday, May 12, 2005

  Mr. CASE. Mr. Speaker, I rise today in strong support of H.R. 2317, 
the Credit Union Regulatory Improvements Act, commonly known as CURIA, 
of which I am a proud original cosponsor.
  As I have noted many times in many ways, our Nation's credit unions 
provide a truly invaluable service to their approximately 84 million 
members throughout our country, including over 742,000 members in my 
Hawai`i alone. Where other financial institutions are unable or 
unwilling to do business as and when desired by consumers, credit 
unions have prospered by offering fair, convenient and relevant 
financing. In doing so, they are one of the key linchpins binding 
together the economic and social life of so many of our communities, 
including those of non-urban and rural America.
  Let me provide you with just one example from my own district: the 
southern portion of my home Island of Hawai`i. Small rural and 
agricultural-based communities are dispersed throughout this low 
population density region, which thus does not lend itself to 
traditional urban-focused banking.
  Instead, the main branch of Ka`u Federal Credit Union, known as the 
southernmost credit union in the United States, is located in the small 
town of Na`alehu and provides its residents with highly personal and 
tailored services. But Ka`u FCU has taken its service a step further 
and added two additional branches in nearby communities--one in Ocean 
View and the other in Pahala--each located in a local grocery store and 
no bigger than the size of a small car.
  Of course, credit unions are prospering in urban and suburban areas 
of our country and my Hawai`i as well. This is because they all share 
the characteristics of highly personal, member-invested services. They 
are thus clearly a great success story throughout our entire country.
  Support for our credit unions should thus be one of our key goals. 
Here in Congress, one of the best ways to do so is to support this 
bipartisan legislation.
  H.R. 2317 contains three major sections, which, as outlined below, 
will modernize credit union net worth standards, advance credit union 
efforts to promote economic growth, and make several needed 
modifications to credit union activities, governance, and oversight.
  According to the National Credit Union Administration (NCUA), the 
independent federal agency that charters and supervises federal credit 
unions, modifications to the Prompt Correction Action (PCA) system are 
needed to ensure that the standards are ``aptly robust'' and ``not 
unduly burdensome or constraining.'' This legislation would revise 
thresholds for PCA net worth categories for credit unions to new net 
worth ratio thresholds that are comparable to those used by the Federal 
Deposit Insurance Corporation (FDIC) for the leverage requirement.
  H.R. 2317 would also provide a much-needed update to the definition 
of net worth in the Federal Credit Union Act for purposes of credit 
union mergers. The Financial Accounting Standards Board has proposed 
eliminating the pooling accounting method for mergers and requiring all 
credit union mergers to apply the purchase method after 2006. Under the 
purchase method of accounting, only the surviving credit union's 
retained earnings count as net worth for PCA purposes. This legislation 
codifies that recommendation.
  Finally, CURIA will update and modernize a number of specific 
outdated regulatory burdens and make other necessary changes to the 
credit union regulatory system, including improving credit union 
leasing arrangements on federal land, permitting limited investments in 
securities, reforming credit union governance, and altering credit 
union conversion voting requirements.
  Mr. Speaker, I commend both the gentleman from California (Mr. Royce) 
and the gentleman from Pennsylvania (Mr. Kanjorski) for once again 
spearheading CURIA. I look forward to working with them and my other 
cosponsors in supporting this vital initiative.

                          ____________________