Now is the time to advance credit union issues

Here at NAFCU, we’re looking forward to our agenda for the remainder of this year and the beginning of 2014. This means finding the best ways to meet our goals of protecting the credit union tax exemption, ensuring that housing finance reform meets the needs of our members and continuing to advance regulatory relief for the credit union industry.

Preserving the credit union tax exemption is our number one priority because it means so much for our industry’s survival. In the upcoming weeks, the House-Senate budget conference committee will complete its work and could lay the groundwork for broader tax reform. At the same time, House Ways and Means Committee Chairman Dave Camp, R-Mich., and Senate Finance Committee Chairman Max Baucus, D-Mont., are continuing their discussions on tax reform and may unveil their proposals later this year or early next.

The past year has seen a fair amount of action on the housing finance reform front. NAFCU has remained heavily involved, testifying before both the House Financial Services Committee and the Senate Banking Committee on this issue.

The House Financial Services Committee has already passed, on a party-line vote, its version of the bill – the “Protecting American Taxpayers and Homeowners (PATH) Act” – which would wind down Fannie Mae and Freddie Mac and replace the government-sponsored enterprises with a privately capitalized system. That legislation is currently awaiting action on the House floor, where its outlook has some uncertainty.

We also expect we may see a new bipartisan proposal from Senate Banking Committee Chairman Tim Johnson, D-S.D., and Ranking Member Mike Crapo, R-Idaho, unveiled for committee consideration later this year. Their bill will likely expand on the concepts outlined in S. 1217, the “Housing Finance Reform and Taxpayer Protection Act of 2013,” introduced earlier this year by Sens. Mark Warner, D-Va., and Bob Corker, R-Tenn. We’ve been working hard to make sure that legislation – as well as the PATH Act in the House of Representatives – reflects the needs of credit unions and their member-owners.

We must ensure that whatever form housing reform takes, an explicit government guarantee for the payment of principal and interest on mortgage-backed securities exists in order to stabilize the market during downturns. Furthermore, credit unions must have guaranteed access to the secondary market to sell their loans. Equally important is creating a system which rewards loan quality instead of loan volume. Credit unions may not be the biggest lenders in the market – but their consistent history of quality and trustworthiness should be recognized, especially during the aftermath of a financial crisis caused by big, misbehaving banks.

Earlier this month, NAFCU was invited to testify before the Senate Banking Committee from a small-lender perspective; our witness, John Harwell of Apple Federal Credit Union, noted in his testimony that the Corker-Warner legislation is a good first step in the debate and that we look forward to working with the committee to improve the bill from a credit union perspective.

Finally, our constant goal in all our advocacy and communication with lawmakers, regulators and others is to fight back against the overregulation that has been burdening credit unions since the financial crisis. We understand how serious the burden is for credit unions – especially small ones – which are being forced to pay for the mistakes of others and treated as though they need the same supervision that the bad actors at the root of the crisis require. Credit unions are, and have always been, a welcome alternative to the kind of Wall Street mentality which caused the financial crisis. Lumping credit unions in with the rest only hurts the communities which depend on these institutions to help them buy homes, go to school and start their own businesses.

NAFCU was the first to propose regulatory relief for credit unions in this Congress when we unveiled a five-point plan for regulatory relief this February, which has already been incorporated into several pieces of legislation. Key bills which feature measures of the NAFCU plan include the “Regulatory Relief for Credit Unions Act” (H.R. 2572) – a comprehensive credit union regulatory relief measure – from Rep. Gary Miller, R-Calif., the “Credit Union Small Business Jobs Creation Act” (H.R. 688), from Reps. Royce and Carolyn McCarthy, D-N.Y. (and its Senate counterpart – S. 968, the “Small Business Lending Enhancement Act” from Sens. Mark Udall, D-Colo., and Rand Paul, R-Ky.) – legislation to increase the credit union member business lending cap—and the “Capital Access for Small Business and Jobs Act” (H.R. 719), from Reps. Peter King, R-N.Y., and Brad Sherman, D-Calif., which would open the door to supplemental capital for credit unions.

With new mortgage regulations set to take effect in January, now is the right time to let lawmakers know that our credit unions need regulatory relief. Furthermore, it seems like the atmosphere is improving for relief efforts: the Senate is looking at the “Privacy Notice Modernization Act” (S. 635), with the House already having passed similar legislation to eliminate redundant privacy notices in the form of H.R. 749 earlier this year.  The House Financial Services Committee just passed the “Credit Union Share Insurance Fund Parity Act” (H.R. 3468) to ensure credit unions have parity with banks in terms of insurance coverage on IOLTA accounts. Both of these bills would help reduce the regulatory burden for credit unions.

We will also continue to promote other important issues to the credit union industry – including patent reform and cybersecurity. We plan to take advantage of the pre-election climate next year to make sure our industry’s issues are at the forefront, and we encourage credit union representatives to do the same: call or write your representative, and help make sure that 2014 is the credit union industry’s year. Sign up now to get your mid-year regulatory update at NAFCU’s Annual Conference and Solutions Expo, and experience powerful grassroots activism firsthand at NAFCU’s Congressional Caucus next fall.

Brad Thaler

Brad Thaler

Brad Thaler has been with NAFCU since July of 1999, first as associate director of legislative affairs, and then, beginning in January 2002, as director of legislative affairs. He was ... Web: www.nafcu.org Details