NAFCU announces 2016 top priorities
WASHINGTON, DC (January 4, 2016) — The National Association of Federal Credit Unions (NAFCU) announced its 2016 top priorities, which include preserving the credit union tax exemption, pushing for credit union regulatory relief and advocating for national data security standards for merchants.
“NAFCU and its members achieved several legislative and regulatory victories in 2015,” said NAFCU President and CEO Dan Berger. “We advanced a key aspect of NAFCU’s five-point plan for regulatory relief for credit unions when President Obama signed into law a transportation authorization bill that includes the text of the “Eliminate Privacy Notice Confusion Act,” legislation clarifying that consumers will receive privacy notices after opening a new account and when their providers’ privacy policies change. “Additionally, as urged by NAFCU, the CFPB agreed to immediately recognize statutory changes to privacy notice requirements for credit unions to avoid confusion with superseded requirements.”
“In 2016, NAFCU will build on its legislative successes from last year. Specifically, we will continue to advocate for legislation that would establish national data security standards holding retailers accountable for breaches on their end, as well as legislation introducing more transparency to the NCUA budget process, and improvements to the Dodd-Frank Act that would help ease some of the unnecessary burden placed on credit unions through the actions of CFPB,” said Berger. “We will also continue our pursuit of regulatory changes at NCUA and statutory changes in Congress on field-of-membership and member business lending rules, both of which NCUA has addressed in new proposals. And we will hold the protection of credit unions’ tax-exempt status as our highest priority.”
The following is a list of NAFCU’s top legislative and regulatory priorities for 2016:
- Preserve the credit union tax exemption – Preserving credit unions’ federal corporate income tax exemption remains NAFCU’s number one legislative priority. NAFCU worked throughout 2015 to debunk banking trades’ false claims about the exemption, and it succeeded in helping keep the tax exemption off of lawmakers’ plans for revision during working group discussions in the House Ways and Means and Senate Finance Committees on overall reform of the tax code. In this election year, however, the issue could get a fresh look. NAFCU will remain vigilant.
- Push for regulatory relief – In 2015, NAFCU put out a new five-point plan for credit union regulatory relief and a new “Top Ten” list of regulations and laws to be changed to provide regulatory relief. NAFCU is getting results from Congress: the Senate continues to work for an agreement to advance S. 1484, the “Financial Regulatory Improvement Act,” a comprehensive package of relief measures that were approved by the Senate Banking Committee last spring, while the House continues to move smaller stand-alone relief bills that have gained bipartisan support. NAFCU testified multiple times in 2015 on the need for relief.
NAFCU will continue its push for credit union regulatory relief in 2016 in Congress and at the regulatory agencies, including the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB).
- Pursue clear Dodd-Frank Act guidance – NAFCU worked throughout the past year seeking clear, transparent guidance from regulators, including NCUA and CFPB, so credit unions have the information they need to ensure their operations are safe, sound and reflective of the spirit and letter of the law governing them. The association has been working toward this end in particular since enactment of the Dodd-Frank Act. Of special concern are those areas of the law – such as its call for a focus on unfair and deceptive acts and practices – that provide few or no specific directives for implementation and for which regulators have yet to provide specific guidance.
- Ensure secondary mortgage market access for credit unions – Preserving a government guarantee, maintaining unfettered access to the secondary market and ensuring fair pricing for credit unions based on loan quality rather than volume will remain a top legislative issue for NAFCU for 2016 as lawmakers continue deliberations on housing finance reform. On the regulatory front, NAFCU will continue to work to ensure that credit unions’ access to the secondary market is not hampered by regulatory actions, including those affecting the cost of working with Fannie Mae and Freddie Mac and GSE loan limits. It will also continue to push for equal access for credit unions to membership in the Federal Home Loan Banks.
- Promote national data security standards for merchants – NAFCU will push hard to win final passage in Congress of national data security standards for merchants similar to standards followed by credit unions under the 1999 Gramm-Leach-Bliley Act. Last year saw the introduction of bipartisan legislation sought by NAFCU in both the House and Senate – the “Data Security Act of 2015” (H.R. 2205/S. 961) – and NAFCU will be working to push that over the finish line in 2016. NAFCU supported last month’s enactment of the Cyber Information Security Act, which provides for a national structure to address cyberattacks on key industries, and it will continue to work with key lawmakers, the White House and industry stakeholders to advance awareness of cyber threats.
- Advance field-of-membership reform – Strengthening the ability for credit unions to serve more consumers and pursuing regulatory relief for credit unions is at the core of NAFCU’s advocacy efforts. In 2015, the NCUA Board undertook a comprehensive review of its field-of-membership rules and proposed a rule that seeks to modernize all federal charter types. What NCUA has done is well within its statutory authority, but as NAFCU and its members continue to analyze the proposal throughout the comment period, the association will be looking for ways that NCUA can do more to create a regulatory environment that promotes health and growth.
- Pursue comprehensive capital reform – NAFCU will continue to push for a fair capital system for all insured credit unions that both provides for true risk-based capital and access to supplemental capital. NAFCU consistently opposed NCUA’s risk-based capital rulemaking, which finally cleared the NCUA Board last October on a split vote of 2-1 and takes effect Jan. 1, 2019. Throughout the rulemaking process, NAFCU urged withdrawal of this rulemaking, but it also won numerous changes to the final rule that represent a vast improvement over the initial proposal. That said, NAFCU believes the final rule still falls short, and it will pursue effective reform in the coming legislative session.
- Ease arbitrary restrictions on member business lending – NAFCU has long advocated for member business lending reform, both through legislation and through regulatory relief from NCUA. Last June, the NCUA Board issued a NAFCU-supported proposal that would remove many of the prescriptive underwriting and personal guarantee requirements, thereby eliminating the current, overly burdensome waiver process. NCUA’s proposed rule reflects numerous changes advocated by NAFCU and constitutes much-needed relief without exposing credit unions, small businesses, or the National Credit Union Share Insurance Fund to undue risk.
NAFCU anticipates a final rule to be issued by the first quarter of 2016. NAFCU will also continue to work with Congress to advance legislation to provide relief from the arbitrary MBL cap.
- Ensure overdraft, payday lending rules make sense – For the past two years, CFPB has listed overdraft on its rulemaking agenda. Based on conversations with CFPB staff, NAFCU believes the bureau will begin its overdraft rulemaking process in early 2016. NAFCU is staying in close contact with CFPB to monitor its timeframe for rulemaking, and it will work to ensure that the substance of any rule does not curtail credit unions’ overdraft programs.
NAFCU expects the bureau to issue a notice of proposed rulemaking on payday lending soon. CFPB is considering imposing several requirements that would limit federal credit unions’ ability to offer NCUA-authorized payday alternative loans, or PALs. NAFCU has met several times with the bureau to discuss PALs and will continue to meet with CFPB to ensure that this rulemaking does not impose any unintended consequences on credit unions.
- Seek fairness under FCC ruling on autodialing – In July 2015, the Federal Communications Commission issued a declaratory ruling and order to clarify its interpretations of the Telephone Consumer Protection Act. NAFCU is concerned that the exemption, as written, will not allow financial institutions to engage in time-sensitive communications with consumers about identity theft or data breaches. It will continue to pursue a fair result for credit unions.
NAFCU asked the court for permission to join the suit as an intervenor-defendant last summer; the court granted that request in October. The association joined in the Dec. 2 filing challenging the order. All filings in this suit must be completed by Feb. 24; oral arguments are expected in to be scheduled after that.
- Ensure an effective payments system – NAFCU and its members continue to be engaged in the Federal Reserve’s evolving payments initiative and roadmap for the U.S. payments system. In January 2015, the Fed announced two task forces to modernize the U.S. payments systems – the Faster Payments Task Force and the Secure Payments Task Force. NAFCU has been in regular contact with the Fed on this issue and in May 2015 joined the two newly formed task forces. NAFCU’s goal in participating is to ensure that any new payments system can be cost-effective, operationally effective and scalable for credit unions of all sizes.
- Keep focus on online lenders – NAFCU believes that the growth of online marketplace lenders underlines the need for regulators to modernize existing regulations on traditional financial institutions to facilitate greater access to credit. NAFCU also continues to maintain that financial regulators must require online market lenders to meet basic consumer protection requirements such as the Truth in Lending Act, underwriting standards for loans, and applicable state usury laws.
The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.