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The House will consider H.R. 1585, the Violence Against Women Reauthorization Act of 2019; S.J. Res. 7, “To direct the removal of United States Armed Forces from hostilities in the Republic of Yemen that have not been authorized by Congress”; and H.Res. 271, “Condemning the Trump Administration's Legal Campaign to Take Away Americans' Health Care.”
The Senate is expected to consider H.R. 268, the Disaster Supplemental Appropriations Act. The Senate may also consider S.Res. 50, a resolution “improving procedures for the consideration of nominations in the Senate.”
The Basel Committee on Banking Supervision is the primary global standard setter for regulation of internationally active banks. So, naturally, what this group does doesn’t affect credit unions, right? Wrong. Well, maybe it affects credit unions in other countries, but surely the work of the Basel Committee doesn’t impact U.S. credit unions, right? Wrong again.
Notwithstanding the mandate of internationally active banks, the Basel Committee has an impact on credit unions here in the United States and around the world. Look no further than NCUA’s risk-based capital rule, which adopts a Basel approach for U.S. credit unions.
Even the Basel Committee acknowledges its standards are not meant for small, non complex institutions, like credit unions. From Basel I through the current standards, Basel III, the Committee focused on the capital adequacy of “international banks” only, with no expectation that the rules would apply to other banks.
CUNA Chief Advocacy Officer Ryan Donovan wrote to all 535 Congressional offices – telling them that credit unions are among the businesses that risk legal action when contacting members due to the Telephone Consumer Protection Act (TCPA). Regulations governing how businesses can interact with consumers are not keeping up with technology, leaving both consumers and businesses at risk.
The CFPB published the Home Mortgage Disclosure Act (HMDA) Modified Loan Application Registers (LARs) data for approximately 5,400 financial institutions. This release is the first to include the additional data reported by certain institutions under the 2015 HMDA rule.
The House Financial Services Committee passed the CUNA-supported H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act by a bipartisan vote of 45-15. If enacted, this legislation would provide a safe harbor for financial institutions serving legal cannabis-related businesses.
Prior to the Committee’s mark-up, CUNA joined with the American Bankers Association (ABA) to send a letter in support of the bill as both entities are committed to serving the financial needs of their communities.
CUNA wrote to Chairwoman Waters and Ranking Member McHenry prior to the House Financial Services Committee mark-up of H.R. 1500, the Consumers First Act. In the letter CUNA expressed concern over provisions in the legislation – including the dilution of the Credit Union Advisory Council.
CUNA’s letter reiterated support for a bipartisan, multimember commission to lead the CFPB.
"Congress has a responsibility to ensure the CFPB is suitably designed to be an effective agent of consumer protection. The current structure—with a single, powerful director—gives too much authority to one person and does not provide meaningful oversight and accountability,” the letter reads. “H.R. 1500 would be a more effective instrument of sustainable change if the bill was grounded in improving the Bureau’s leadership structure through the adoption of a multimember, bipartisan commission.”
CUNA wrote to Chairman Crapo and Ranking Member Brown highlighting CUNA’s commitment to working with the Committee to create a strong foundation for housing reform. CUNA believes that the Chairman’s early blueprint for housing finance reform is a solid start to beginning the work of rebuilding the secondary mortgage market.
“As important as it is to act to reform the secondary mortgage market, it is even more important to get it right,” the letter reads. “CUNA and our members continue to believe that for credit unions and our members, getting it right should mean one thing: Community lenders must be at the core of the future secondary mortgage market.”
CUNA wrote to Chairman Moran and Ranking Member Blumenthal and Chairman Krishnamoorthi and Ranking Member Cloud prior to Subcommittee hearings on data privacy and security.
The House Oversight and Reform Subcommittee on Economic and Consumer Policy conducted its hearing on improving data security at consumer reporting agencies, while the hearing conducted by the Senate Commerce Subcommittee on Manufacturing, trade and consumer protection covered small business perspectives on data privacy.
CUNA wrote to Chairman Neal and Ranking Member Brady prior to the Ways and Means Committee hearing entitled, “The 2017 Tax Law and Who It Left Behind.” In the letter CUNA wrote about the importance of having not-for-profit credit unions as vibrant and viable alternatives in the financial services marketplace and reminded the Committee of the significant financial benefits credit unions provide to their members.While the Tax Cuts and Jobs Act of 2017 (TCJA) did not make any alterations to credit unions’ tax status it imposes several taxes on not-for-profit entities.
Recent NCUA releases cover several current issues that may be of interest.
The House will consider H.R. 7, the Paycheck Fairness Act and H. Res. 124, “Expressing opposition to banning service in the Armed Forces by openly transgender individuals.”
The Senate is expected to consider Bridget S. Bade, to be United States Circuit Judge for the Ninth Circuit. The Senate may also vote on S.J.Res.8, a joint resolution “recognizing the duty of the Federal Government to create a Green New Deal,” as well as H.R. 268, a bill to make supplemental appropriations.
The Department of Labor (DOL) published its proposed overtime rule Friday. Under the proposal, employees with a salary level of $35,308 per year (up from the current $23,660 per year) must be paid overtime if they work more than 40 hours per week.
The DOL previously finalized an overtime rule in 2016, but a federal judge blocked its implementation in November 2016. That rule would have raised the threshold to $47,476 annually.
CUNA had expressed concerns about this previous DOL rule, warning that the threshold change would magnify regulatory burdens faced by credit unions and could negatively impact credit union members by potentially forcing changes in employment situations.
CUNA wrote to the Senate Banking Committee leadership in response to an invitation for stakeholder feedback on collection, use and protection of personal information by financial regulators and private companies.
“Congress should not expect any data privacy law it may enact to succeed in providing the desired level of privacy if such legislation does not also require all businesses and originations that collect, use and house personally identifiable information (PII) to protect that data consistent with strong, federal security requirements,” the letter reads. “A federal data security standard is essential to provide Americans with the comfort and confidence that the information that they share with businesses and organizations will remain private and secure.”
As the Senate Banking Committee has jurisdiction over financial institutions, CUNA urges it to “work with other committees and the administration to address consumer data privacy and data security so that all Americans can feel confident that their personal information is protected from breach and will not be misused by any company that possesses it.”
CUNA filed its comments with the Federal Housing Finance Agency on its proposed parameters for the Enterprises Validation and Approval of Credit Score Models. The proposal is in direct response to language in S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act, designed to increase credit score competition in the mortgage market. CUNA’s comment noted that increased market competition in the credit-score industry could be beneficial to both consumers and lenders because it can improve efficiency, decrease pricing, and potentially expand the market of consumers for mortgage products. The comment also acknowledged, however, that the frequent modification of the GSEs credit-scoring models or a requirement that they use multiple models at the same time could discourage competition in the lending market by increasing costs for smaller lenders less capable of quickly and cost-effectively absorbing those changes into their own underwriting systems or paying the resulting increased prices to access the systems of the third-party vendors they rely upon. Ultimately,
CUNA acknowledged the FHFA’s recognition of the need for cost-benefit analysis as a core component of its proposed validation and approval process. But the comment expressed concern about the adequacy of the proposed cost-benefit analysis because it only vaguely, if at all, referenced lender implementation costs as a factor for consideration. Going forward, CUNA urged the FHFA to adopt a proposal that directly required lender implementation costs to serve as a consideration in the analysis.
The President delivered the remainder of his Fiscal Year 2020 budget to Congress. The Administration’s budget is an explanation of its spending priorities and does not have the force of law.
The president’s budget always has a section, as required by law, in which Treasury rescores all tax expenditures, including the ten-year cumulative “cost” of the credit union “tax expenditure.” Basic scoring off the tax expenditure is the credit union movement’s retained earnings multiplied by the corporate income tax rate. In the 2017 tax reform law, the corporate rate was lowered from 35% to 21%. That likely accounts for the drop in the “cost” of the credit union tax expenditure … $1.8 billion in 2019.
The budget sent to Congress recommends the elimination of the Community Development Financial Institutions (CDFI) Fund in FY 2020. This was the same recommendation for FY 2017 and 2018. In FY2019, the President recommended spending $14 million to service then current obligations. His budget again requests $14 million to administer the Fund’s outstanding loan and grant obligations.
The CFPB announced several amendments to its advisory committee charters, including for the Credit Union Advisory Council (CUAC). The CFPB’s other advisory committees are the Consumer Advisory Board (CAB), Community Bank Advisory Council (CBAC), and Academic Research Council (ARC).
According to the CFPB’s release, the councils will “expand their focus to broad policy matters and increase the frequency of in-person meetings from two times a year to three times a year.” In addition, the membership terms will be extended from a one-year term to two-year terms, and the terms will be staggered. For existing CUAC members, their one-year term will expire in September 2019. However, a one-year term extension will be provided to half of the current members “in order to achieve the staggered terms and ensure continuity.”
The changes are the result of CFPB Director Kathy Kraninger’s solicitation of feedback from current and former advisory committee members during a three-month listening tour. CUNA advocated for the CFPB to preserve the CUAC as a valuable resources and called on the Bureau to extend the members terms in order to provide stability to the council and ensure the members have the opportunity to gain experience in the Council’s process.
In its release, the CFPB also announced that it will begin accepting applications for new council members. The Bureau will accept applications for 45 days, beginning with a notice to be published in the Federal Register.
If you are interested in being nominated by CUNA for a seat on the CUAC, please reach out to Alexander Monterrubio, Senior Director of Advocacy & Counsel at firstname.lastname@example.org.
The CFPB is hosting an webinar on April 9, 2019, highlighting the findings from its new report: Suspicious Activity Reports on Elder Financial Exploitation: Issues and Trends.
The webinar will provide key facts, trends, and patterns revealed in Suspicious Activity Reports (SARs) filed by banks, credit unions, money transmitters, and other financial services providers. The presenters will discuss the implications of these findings and next steps.
According to the Bureau, key audiences for this webinar include financial institutions, law enforcement, prosecution, adult protective services, the aging network, and others working to enhance protections for older adults.
The Small Business Administration (SBA) announced several regional roundtables to discuss the Department of Labor’s (DOL) proposed Overtime Rule, which would increase the minimum salary for the “white collar” overtime exemption from $23,660 annually to $35,308 annually. In effect, under the proposal, workers earning under $35,308 annually would be eligible for overtime pay if they work more than 40 hours per week.
The SBA Roundtables will be an opportunity for the SBA to hear directly from credit unions about the potential impact of the proposed rule. Comments on the rule are due 60 days after its publication in the Federal Register (TBD
In another litigation victory for credit unions, the U.S. District Court for the Southern District of Ohio dismissed a lawsuit filed against a federally-chartered credit union based in Dublin, Ohio. The lawsuit alleged the credit union’s website violated the Americans with Disabilities Act (ADA).
CUNA and the Ohio Credit Union League filed an amicus brief in support of the credit union’s motion to dismiss.
Recently, a lot of questions have been raised in the press about whether Senator Elizabeth Warren’s new American Housing Economic Mobility Act of 2019 would increase credit unions’ regulatory burdens—despite removing them from an obligation to comply with the Community Reinvestment Act. Another trade association has specifically claimed that the bill adds new reporting, comment, and hearing requirements that do not presently exist and that they, presumably, oppose.
In response to those questions and claims, CUNA is committed to doing what we have always done: Providing fact-based, accurate, and thoroughly researched insights and analysis that our members can confidently depend upon when reaching their own conclusions.
Accordingly, please see this link to CUNA's comparison chart for Senator Warren’s bill. With it, you’ll be able to compare the bill’s language to the existing regulatory requirements for credit unions and the Financial Services for the Underserved Act of 2017—legislation that the National Association of Federally-Insured Credit Unions, NAFCU, successfully sought to have introduced in the 115th Congress. We believe that once you have an opportunity to view the facts for yourself, you will see why CUNA believes that Senator Warren’s bill is a victory for credit unions---one that eliminates the threat of CRA, codifies existing regulatory requirements, and even lessens the regulatory burdens attached with the expansion of credit unions’ abilities to reach underserved communities.
CUNA's Chief Advocacy Officer - Ryan Donovan sent an email to all 535 Congressional offices reminding them of our message during CUNA GAC: credit unions are different from other financial institutions.
The Senate voted to confirm Rodney Hood and Todd Harper to serve on the NCUA board, giving NCUA a full three-person board for the first time since April 2016.
“CUNA, leagues and credit unions congratulate Rodney Hood and Todd Harper for their confirmation as NCUA board members. We look forward to working with a full, three-person NCUA board on the issues most important to credit unions and their members,” said CUNA President/CEO Jim Nussle. “Both have impressive experience when it comes to working with not-for-profit financial cooperatives, and we’re hopeful the new board will continue NCUA’s modernization efforts to ensure it remains an efficient, effective regulator.”
The Credit Union Advisory Council (CUAC) met in Washington, D.C. on Thursday to advise the CFPB on several issues of importance to credit unions, including HMDA, credit reporting, PACE, and financial literacy. CUNA attended the session.
The members of the CUAC, all of which are CUNA-member credit unions, provided feedback, including calling for the Bureau to consider increasing HMDA reporting thresholds and reducing the data set after its substantial expansion in the 2015 HMDA Rule. In its discussion of credit reporting, the members expressed concern with so-called “credit repair” businesses which often file frivolous disputes of legitimate debts in the hopes of straining a credit union’s resources available to respond.
Today, the NCUA Board received its quarterly briefing on the status of the Share Insurance Fund and adopted a final rule regarding loans to members.
CUNA wrote letters to Senator Warren and to Representatives Richmond, Moore, Cummings and Lee in support of the American Housing and Economic Mobility Act of 2019. This legislation is an updated version of the Senator’s housing legislation, a version of the bill that reflects significant engagement between CUNA, leagues, credit unions and Warren. Unlike the previous version, the American Housing and Economic Mobility Act of 2019 would not require credit unions to comply with the Community Reinvestment Act (CRA).
As stated in the letter, the American Housing and Economic Mobility Act of 2019 is an important effort to improve access to the housing market for members of all communities and, in the process, properly recognizes the distinctions that exist between credit unions and banks when meeting community needs. The legislation rejects a one-size-fits all approach by explicitly excluding credit unions from the Community Reinvestment Act and instead codifying the already existing community outreach, input, and oversight policies that credit unions have been abiding by for more than 20 years under National Credit Union Administration regulations.
“This bill is a shining example of 360-degree advocacy in action. When Senator Warren initially planned to expand CRA and place onerous and duplicative regulations on credit unions, we collaborated with League partners and the Senator to show the many ways that credit unions have been fulfilling requirements to support underserved communities for well over two decades. Recognizing the power that credit unions bring these communities, Senator Warren pivoted to instead codify into law the regulations that have been dictating our actions for many years. We look forward to working with the Senator and other likeminded lawmakers to ensure that credit unions are able to continue serving these communities for the foreseeable future.” – Jim Nussle, CUNA’s President & CEO
CUNA participated in a joint trade meeting with Assistant Attorney General (AAG) Eric Dreiband, head of the Department of Justice’s (DOJ) Civil Rights Division, and Rebecca Bond, Chief of the Disability Rights Section, to discuss the need for formal ADA website accessibility standards. The meeting included several trades from other industries, including restaurants, retail businesses, and banks. CUNA was the only trade representing credit unions to participate in the coalition.
CUNA wrote to Chairwoman Waters and Ranking Member McHenry prior to the Financial Services Committee hearing entitled, “Preparing for the Storm: Reauthorization of the National Flood Insurance Program.”
As stated in the letter, credit unions play an increasingly important role in the housing finance market and, as a result, have a vested interest in the ongoing stability of the National Flood Insurance Program.
CUNA wrote to Chairwoman Waters and Ranking Member McHenry prior to the Committee’s hearing, “Holding Megabanks Accountable: An Examination of Wells Fargo's Pattern of Consumer Abuses.” In the letter, CUNA ensured that the Committee is aware of the credit union difference.
“The importance of having not-for-profit credit unions as vibrant and viable alternatives in the financial services marketplace is as significant today as it has ever been. The fact that this hearing is happening at all provides ample evidence of the need for this alternative in the marketplace. Credit unions provide accessible and affordable basic financial services to people of all means and encourage the equitable distribution of capital across all individuals, families, communities and small businesses.”
CUNA wrote to Chairman Crapo and Ranking Member Brown prior to the Senate Banking Committee’s hearing, “The Consumer Financial Protection Bureau's Semi-Annual Report to Congress.”
Similar to last week’s hearing in the House Financial Services Committee, Director Kraninger faced questions including the payday lending rule, Military Lending Act authority and oversight of the student lending industry.
CUNA wrote to Representatives Zeldin and Gonzales in support of their recently introduced legislation – H.R. 1661, a bill that would amend the Federal Credit Union Act to provide the NCUA with the flexibility to increase loan maturity limits for federal credit unions.
The House will consider H. Con. Res. 24, “Expressing the sense of Congress that the report of Special Counsel Mueller should be made available to the public and to Congress.”
The Senate is expected to consider Paul Matey to be a United States Circuit Judge for the Third Circuit.
The President is expected to partially release his fiscal year 2020 budget outline this week.
CUNA wrote to Representatives Perlmutter, Heck, Stivers, and Davidson in support of their recently introduced legislation - the Secure and Fair Enforcement (SAFE) Banking Act of 2019, which would permit credit unions in states where marijuana is legal to safely serve their members’ related needs.
As stated in the letter, CUNA takes no position on the morality or wisdom of legalizing or decriminalizing medicinal or recreational cannabis at either the state or federal level. However, credit unions operating in states where it is legal have members and member businesses involved in the cannabis market who need access to traditional depository and lending services, the absence of which creates a significant public safety issue.
CUNA's Chief Advocacy Officer, Ryan Donovan, sent an email to all 535 Congressional offices prior to the start of the 2019 Governmental Affairs Conference that kicks off this weekend! In the email, he highlighted a few keys things:
The NCUA board approved a $160.1 million equity distribution from the National Credit Union Share Insurance Fund (NCUSIF) that will be paid to eligible credit unions in the second quarter of 2019. This is the second such distribution from the NCUA. The first, in the amount of $735.7 million, went to credit unions starting in July 2018.
CUNA was the only national credit union trade association to support NCUA closing the Temporary Corporate Credit Union Stabilization Fund in 2017, which led to last year’s distributions.
“We commend NCUA for its prudent stewardship of credit union funds and for recognizing that this money could be best put to use serving credit union members around the country,” said CUNA President/CEO Jim Nussle. “CUNA was the only national credit union trade association advocating for distributions because we know credit unions will put these funds to work for their members.”
CUNA wrote to Chairwoman Waters and Ranking Member McHenry prior to the House Financial Services Committee hearing, “Putting Consumers First? A Semi-Annual Review of the Consumer Financial Protection Bureau.” This is Director Kraninger’s first time before the Committee since her Confirmation in December.
Earlier in the week, CUNA President/CEO Jim Nussle, Deputy Chief Advocacy Officer Elizabeth Eurgubian and Senior Director of Advocacy and Counsel Alexander Monterrubio met with Director Kathy Kraninger.
In the letter to the Committee, CUNA wrote that the CFPB should examine and modify where necessary its approach to rulemaking.
CUNA wrote to Chairman Portman and Ranking Member Carper prior to the Senate Homeland Security’s Permanent Subcommittee on Investigations hearing entitled, “Examining Private Sector Data Breaches.”
In the letter CUNA wrote that the cornerstone of any new data privacy requirements should be robust data security requirements for entities that collect consumers’ personal information.
“Credit unions have met with members of this committee to detail damage to credit unions and their members from data breaches. The current gaps in data protection and privacy laws hurt consumers and businesses as information is misused by criminals and other actors with malicious intent. Financial institutions are at the vanguard for misuse of stolen data.”
CUNA President/CEO Jim Nussle, Deputy Chief Advocacy Officer Elizabeth Eurgubian and Senior Director of Advocacy and Counsel Alexander Monterrubio met with Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger Today. Kraninger was confirmed as CFPB director in December, and has previously met with CUNA, leagues and credit unions.
“We thank Director Kraninger for her time and attention today as we discussed the unique nature of credit unions, and the bureau can use its exemption authority to move away from one-size-fits-all style rulemaking to benefit 115 million credit union members,” Nussle said. “We anticipate future engagement with the bureau and CUNA, leagues and credit unions going forward as we all share the goal of ensuring consumers have access to safe and affordable financial products and services.”
Kraninger is scheduled to make her first appearance as director before the House Financial Services Committee Thursday, and before the Senate Banking Committee next week.
In addition to the letter CUNA sent to the Financial Accounting Standards Board (FASB) yesterday, CUNA also joined other trades in writing to the U.S. Security and Exchange Commission (SEC) and FASB urging a delay implementation of its current expected credit loss (CECL) standard to ensure there are no unintended consequences.
“We believe it is important to delay implementation of CECL in order to allow for time to conduct a quantitative impact analysis and to consider potential alternatives, while allowing for post-issuance field testing,” the letter reads. “Time for further assessment will also allow regulators to better understand and address the key consequences of any proposal for capital and other regulatory purposes.”
The CFPB issued an Advance Notice of Proposed Rulemaking (ANPR) requesting public comment on Property Assessed Clean Energy (PACE) financing. Last year’s Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155) included provisions directing the Bureau to extend certain consumer protections to PACE financing.
According to the ANPR, the “information solicited will enable the Bureau to better understand the market and unique nature of PACE financing. This will help the Bureau formulate proposed regulations that not only would achieve statutory objectives but also would reflect a careful consideration of costs and benefits.”
CUNA filed a comment
letter with the Financial
Accounting Standards Board (FASB) regarding its Targeted Transition Relief proposal
that is intended to ease transition to the credit losses standard (CECL) by
providing the option to measure certain types of assets at fair value.
The House will consider H.R. 1, the For the People Act of 2019.
The Senate is expected to consider Allison Jones Rushing, of North Carolina, to be United States Circuit Judge for the Fourth Circuit.
CUNA and the World Council of Credit Unions (WOCCU) wrote to Chairwoman Nita Lowey and Ranking Member Hal Rogers prior to the Appropriations Subcommittee’s hearing entitled, “Oversight of U.S. Agency for International Development (USAID) Programs and Policies.”
In the letter, CUNA and WOCCU called for a level playing field for smaller contractors, such as credit unions, when it comes to the U.S. Agency for International Development (USAID) prioritizing procurement reforms.
The U.S. District Court for the Western District of Pennsylvania granted preliminary approval of a proposed settlement in the First Choice Federal Credit Union v. The Wendy’s Company, a data breach lawsuit brought by Credit Union National Association (CUNA), Leagues, and credit unions affected by the data breach, on February 26, 2019.
The FHFA released its final rule on the Uniform Mortgage-Backed Security—regulations meant to align Fannie Mae and Freddie Mac Practices to address concerns about the ability of the single security initiative to launch this summer and its impact on the TBA market.
CUNA Chief Advocacy Officer Ryan Donovan wrote to 535 Congressional offices Thursday continuing CUNA’s call for data privacy and security legislation.
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
© 2019 Credit Union National Association
ADA Compliance Notice & Legal
© 2019 Credit Union National Association
ADA Compliance Notice & Legal