Preserving the Credit Union Tax Status
Congress has provided the credit union federal tax-exemption because of the not-for-profit, cooperative structure of credit unions, and the special
mission credit unions have to serve consumers. The credit union tax status is not based on the size of credit unions or the products and services
that they offer; it is based on the credit union structure. This rationale for the tax-exempt status has been ratified several times by Congress.
Credit unions face a crisis of creeping complexity with respect to
regulatory burden. Every dollar a credit union spends on complying with
regulation is a dollar that is not used for the benefit of its members.
Most of the costs of compliance do not vary by size, and therefore
proportionately are a much greater burden for smaller as opposed to
NCUA's Risk-Based Capital Proposed Rule
The NCUA has recently reissued its risk based capital proposed rule. We ask that Congress consider the new proposal and giving credit unions access to supplemental capital to meet the new risk-based capital requirements.
In the years since the CFPB stood up, the crisis of creeping complexity
with respect to credit union regulatory burden has not diminished;
has gotten worse. Changes to the structure of the Bureau could help
improve the regulatory environment for credit unions, which is why CUNA
legislation to change the leadership structure of the CFPB, the powers
of the Financial Stability Oversight Council (FSOC), the funding of the
and the use of consumer information by the Bureau.
FHLB Membership Eligibility Parity
A proposed Federal Housing Finance Agency (FHFA) rule would require all
Federal Home Loan Bank (FHLB) member credit unions, but only certain
banks, to hold 10 percent of assets in “residential mortgage loans” on
an ongoing basis.
Access to Federal Home Loan Banks for Privately Insured Credit Unions
State-chartered credit unions that are privately insured cannot apply
for membership to the FHLB system under current law; H.R. 299 would
correct this drafting error and allow them access.
The Privacy Notice Modernization Act
The Eliminate Privacy Notice Confusion Act would provide benefits for
both credit unions and their members, by streamlining compliance burden
enhancing greater member awareness of the credit union’s privacy
Eight mortgage rules which were finalized in October of 2013 have come
into effect in January of 2014 and have drastically affected credit
We ask that Congress supervise the implementation of these rules
allowing flexibility within the tight deadlines which have been set and
unions from the QM rule or at least alter the definition of points and
Federal Credit Union Act Modernization
National Credit Union Act has not been significantly updated since
1998, We suggest modernizing the Act to reflect the more complicated
financial services marketplace today.
The Need for Capital Reform
Congress should enact the Capital Access for Small Businesses and Jobs Act (H.R. 719), which would modify the definition of credit union net worth to include supplemental
forms of capital for credit unions and allow the regulator to develop risk based capital standards for the purposes of prompt corrective action (PCA).
Member Business Lending
Congress should eliminate the business lending cap or allow well-capitalized credit unions operating
the business lending cap to increase their business loan offerings to
27.5% of total assets, if they receive approval by the NCUA. They should also exempt 1-4 family non-owner occupied residential loans to be exempt from the cap; the entirety of an SBA backed loan should also be exempt.
Patent Litigation Reform
Recently, credit unions have experienced a dramatic increase in the
number of demand letters from non-practicing entities (NPEs). These
commonly referred to as “patent trolls,” acquire large numbers of
obscure or dormant patents and then blanket an industry with demands for
fees. Credit unions are often forced into settlements or face expensive
litigation. Congress should support legislation that diminishes the
practices of patent trolls, particularly in the area of curbing demand
letter abuse, lessening impediments to appeal frivolous infringement
and requiring stronger indemnification policies for end-users.
Credit Unions are strictly regulated with regard to data security and
notification of data breaches to affected members under the Gramm-Leach
CUNA supports legislation which holds all entities responsible for data
security and that which would allow credit unions to notify members not
that a data breach has occurred but also the source of the breach.
Concerns regarding bank and credit union examinations increase during difficult economic times. Congress is considering legislation to bring fairness to the examination process.
Housing Finance Reform
As Congress considers comprehensive housing finance reform, it is imperative that the new system facilitate credit union lending so that credit unions
may continue to be a source of reliable mortgage credit for their members.
The Merchant Payment Coalition continues their effort to reduce the fees merchants pay in order to accept payment cards. While these groups continue to
raise this issue with Congress, much of the more recent action is taking place in the courts and in state legislatures.
Foreign Account Tax Compliance Act (FATCA)
The Foreign Account Tax Compliance Act (FATCA) places new and significant compliance costs on U.S. credit unions, especially those that engage in
remittances and/or have members who are not US citizens. Congress should repeal FATCA in order to stop the law’s increasing regulatory burdens.