Two Bills Worth Knowing About

Bloomberg news is highlighting two bills passed by Congress yesterday that I think are worth knowing about.

First there is H.R. 1457. This bill would set a national standard for financial institutions, including credit unions that want to accept online account applications. The bill establishes a national standard for the acceptance of scanned driver’s license or identification card when individuals are applying for a banking product or to open an account. I actually thought that the acceptance of scanned personally identifiable information was no longer an issue but according to Bloomberg there are still some state laws that stand in the way of fully optimizing online account opening.

The second bill has absolutely nothing to do with credit unions but speaks volumes about how much the banking industry has evolved since the expansion of interstate banking. H.R. 1426 would create a new type of financial institution called a Covered Savings Association. These entities would be allowed to exercise many of the same powers of a nationally chartered bank without having to go through the formal charter conversion process.

Why is this bill more important than it seems? Go back a generation ago and there were fierce jurisdictional battles between community banks and savings associations on one side and national banks on the other. In fact, this tension was helpful to credit unions since it meant that banks had something to do other than think of ways of hurting our industry. Times have changed. We are fast approaching the point when credit unions and national banks are the only two financial charters left standing.