Removing Barriers Blog

Senate Appropriations Committee Passes Legislation to Fund Key CU Priorities
Posted June 21, 2018 by CUNA Advocacy

This afternoon, the Senate Appropriations Committee passed the Financial Services and General Government Appropriations Act for Fiscal Year 2019.

This legislation includes CUNA-supported funding of $250 million for the Community Development Financial Institutions (CDFI) Fund.  CUNA also strongly supports the bill's appropriation of $2 million for the Community Development Revolving Loan Fund.  Both of these accounts are fully funded at Fiscal Year 2018 levels, an achievement in this austere fiscal climate.

The bill also funds other accounts of importance to credit unions, including:

  • $30 billion loan volume cap for the Small Business Administration’s (SBA) 7(a) program, which allows the government to guarantee up to 85% of loans, with the guaranteed portion not counting against credit unions’ cap on member business lending.  The loan cap in this bill is $1 billion more than Fiscal Year 2018’s enacted level of $29 billion.
  • $7.5 billion loan cap for the SBA’s 504 loan program, which is used for long-term, fixed-rate financing on major fixed assets, such as equipment and real estate.  Credit unions also participate in this loan program.

The bill’s report language also contains a number of other items of interest to credit unions, including:

FinCen Money Laundering. — Urges FinCen to continue to work closely with the Department of Justice to combat money laundering through U.S. financial institutions.

IRS Data Security Protections. — The Committee directs the IRS to brief the Committee within 90 days on the IRS’s efforts to protect personally identifiable information of minors.

Earlier this month, the House Appropriations Committee passed the Financial Services and General Government Appropriations Act for Fiscal Year 2019.  The bill funds critical government programs and includes numerous regulatory relief provisions for credit unions and banks.  While this legislation will face difficulty in the Senate, this bill continues to build upon CUNA’s Campaign for Common-Sense Regulation.

In the funding portion of this bill, $216 million is directed to the Community Development Financial Institutions (CDFI) Fund.  Last year, the Committee allocated $190 million for the CDFI Fund.  Working with our allies in Congress last year, that figure was increased to $250 million by the time the president signed the legislation into law.  We will repeat that strategy and success again this year.  Examples of CDFIs include community development banks, community development credit unions, community development loan and venture capital funds, and microenterprise loan funds.  CDFIs are required to provide a 1:1 match for most of the awarded funds, which are offered on a competitive basis.  CDFIs finance community development initiatives such as small businesses, community facilities, and low-income housing.

Also in the House Appropriations Committee, the Community Development Revolving Loan Fund (CDRLF) is funded at $2 million in this bill.  In last year’s subcommittee draft for fiscal year 2018, this program received no funding.  However, in the full committee markup last July, CUNA worked with Congresswoman Jaime Herrera Beutler (R-WA) and FSGG Chairman Tom Graves (R-GA) to include $2 million in the “Manager’s Amendment” to fully restore funding to the CDRLF.  Because of CUNA’s work last year and our advocacy since then, the FSGG Subcommittee chose to fully fund this program in its initial FY 2019 draft.  The CDRLF assists credit unions serving low-income communities.

For the Small Business Loan Administration, the House bill also provides a maximum loan limit of $30 billion for the Section 7(a) loan program, a $1 billion increase over Fiscal Year 2018.  It also directs the SBA to provide the same FY 2018 Section 504 Loan Program maximum loan limit of $7.5 billion.  Credit unions make both 7(a) and 504 loans.

Most importantly, this bill does not place the National Credit Union Administration (NCUA) under the Congressional appropriations process.  Such a provision was included in last year’s bill and CUNA worked with Congressman Mark Amodei (R-NV) to offer a successful amendment to strip that provision when the full House of Representatives considered the bill.

The House Fiscal Year 2019 bill provides many regulatory relief provisions that would benefit credit unions.  It includes:

  • A two year delay to the effective date of the NCUA’s risk-based capital rule, from January 1, 2019 to January 1, 2021.
  • The Mortgage Choice Act, which specifies that neither escrow charges for insurance nor affiliated title charges shall be considered "points and fees" for purposes of determining whether a mortgage is a "high-cost mortgage."  A high-cost mortgage designation restricts the terms of the loan and requires a lender to make certain unnecessary disclosures to the borrower.  As H.R. 1153, this legislation passed the House earlier this year by a vote of 280 – 131.  As part of H.R.10, the Financial CHOICE Act of 2017, this bill passed the House last year by a vote of 233 – 186.
  • The Privacy Notification Technical Clarification Act, which would exempt a financial institution, under specified circumstances, from the requirement to annually disclose its privacy policies to consumers.  As H.R.2396, this bill passed the House late last year by a vote of 275 – 146.
  • The Financial Institutions Examination Fairness and Reform Act, which would enhance the rights of financial institutions and reduce unnecessary and burdensome features that accompany the federal financial examinations of banks and credit unions.  As H.R.4545, this bill passed the House in March by a vote of 283 to 133.  As part of H.R.10, the Financial CHOICE Act of 2017, this bill passed the House last year by a vote of 233 – 186.
  • The TRID Improvement Act, which would require the Consumer Financial Protection Bureau to allow the accurate disclosure of title insurance premiums and any potential available discounts to homebuyers.  As H.R.3978, this bill passed the House in February by a vote of 271 – 145.  As part of H.R.10, the Financial CHOICE Act of 2017, this bill passed the House last year by a vote of 233 – 186.
  • The Bureau of Consumer Financial Protection–Inspector General Reform Act, which would establish an independent Inspector General at the BCFP, nominated by the President and confirmed by the Senate.  As part of H.R.10, the Financial CHOICE Act of 2017, this bill passed the House last year by a vote of 233 – 186.
  • A provision to place the BCFP under the appropriations process starting in fiscal year 2020.  As part of H.R.10, the Financial CHOICE Act of 2017, this bill passed the House last year by a vote of 233 – 186.
  • A provision giving the president the authority to remove the Director of the Bureau of Consumer Financial Protection.
  • A provision to require congressional review of BCFP rulemaking.  This provision would require the BCFP to submit proposed rules for congressional review.  Non-major rules would go into effect after submission to Congress, while major rules would require a joint resolution of approval before going into effect.