NAFCU welcomes 115th Congress, Announces 2017 top priorities
WASHINGTON, DC (January 3, 2017) — Today, the National Association of Federally-Insured Credit Unions (NAFCU) President and CEO Dan Berger, Executive Vice President of Government Affairs and General Counsel Carrie Hunt, Vice President of Legislative Affairs Brad Thaler and other key NAFCU legislative staff welcomed the convening 115th Congress. NAFCU also announced its 2017 top priorities, which include preserving the credit union tax exemption, pushing for credit union regulatory relief and housing finance reform.
“For both new and returning members of Congress, it is vital they understand the unique value of credit unions—not-for-profit, member-focused financial institutions— in America’s financial landscape,” said Berger. “We welcome the opportunity to work with Congress and the Trump administration to promote a positive business environment that will allow credit unions to succeed and help our nation’s economy to prosper.”
Dozens of lawmakers, including numerous freshman and incumbent members, were on the NAFCU agenda today. NAFCU participated in brief visits with members of Congress, viewing of the noon swearing-in ceremony and selected events throughout the day. NAFCU Senior Director of Legislative Affairs Chad Adams, Associate Directors of Legislative Affairs Allyson Browning and Gaurav Parikh were also on hand to welcome lawmakers.
The following is a list of NAFCU’s top legislative and regulatory priorities for 2017:
- Preserve the credit union tax exemption-Preserving credit unions’ federal corporate income tax exemption remains NAFCU’s number one legislative priority. While no member of Congress has proposed eliminating the exemption, this issue could get a fresh look with new eyes under a new Republican administration and Republican-controlled Congress. NAFCU will remain vigilant.
- Push for regulatory relief, CFPB exemptions-Congress and regulators, including the CFPB, have agreed that credit unions did not cause the financial crisis. NAFCU will continue to press the CFPB to use its authority under Section 1022 of the Dodd-Frank Act to exempt credit unions from its regulations. NAFCU will also seek greater CFPB reforms and accountability including replacing the director with a commission. NAFCU was the only financial services trade association to oppose CFPB authority over credit unions, and it will continue to urge the bureau to make better, more effective decisions in how it exercises its authority.
- Repeal the Durbin amendment-Last year saw legislation introduced in the House and passed out of committee to repeal the Dodd-Frank Act’s Durbin amendment. In 2017, NAFCU will continue to push for repeal of the failed Durbin measure and to fight against any efforts to expand interchange price caps to credit cards. NAFCU will also continue to advocate on behalf of our member credit unions for a reasonable return from interchange fee income.
- Protect CUs’ interests in housing finance reform-Effective housing finance reform that preserves a government guarantee, maintains unfettered access to the secondary market and ensures fair pricing for credit unions based on loan quality, not volume, will remain a top legislative issue for NAFCU for 2017 as lawmakers continue deliberations on the disposition of the government-sponsored enterprises, including Fannie Mae and Freddie Mac.
NAFCU is also monitoring progress on the Federal Housing Finance Agency’s proposal on membership requirements for the Federal Home Loan Banks, and NAFCU will continue to work with the FHFA to ensure the agency’s activities do not hinder credit unions’ ability to sell mortgages on the secondary market.
- Promote national data security standards for merchants-NAFCU will ramp up efforts to win final passage in Congress of national data security standards for merchants like those credit unions follow under the 1999 Gramm-Leach-Bliley Act. In addition to pushing for bipartisan legislation to this end (the “Data Security Act of 2015,” H.R. 2205/S. 961), NAFCU will seek to increase credit union awareness of cyber threats. NAFCU is also continuing to monitor the NCUA’s supervisory priorities related to cybersecurity and seeking to ensure credit unions are not held to overly burdensome cybersecurity standards.
- Advance and defend field-of-membership reform-Strengthening the federal charter and pursuing regulatory relief for federal credit unions is at the core of NAFCU’s advocacy efforts. At the federal level, the NCUA last October finalized the most comprehensive reform of its field-of-membership rules in 10 years and issued additional, proposed improvements for comment. Meanwhile, the association will continue to pursue more FOM relief, including the elimination of or increase in core-based statistical area population limits, the establishment of a formal notification process for credit unions making FOM-related applications and the consideration of new ways to efficiently authorize mergers.
With bankers now also challenging the NCUA in the courts over FOM, NAFCU will be working to ensure the rules are implemented swiftly, defend credit unions’ interests and support the legality of the agency’s rules.
- Pursue a true, risk-based capital system-NAFCU believes legislative reforms will be required to achieve a true and fair risk-based capital system for credit unions. To that end, we have outlined a legislative solution that would institute changes to credit union regulatory capital requirements.
This plan directs the NCUA, with industry representatives, to conduct a study on prompt corrective action and recommend changes; modernize capital standards to allow supplemental capital; design a risk-based capital regime for credit unions that takes into account material risks; and establish special capital requirements for newly chartered federal credit unions.
- Ease arbitrary restrictions on member business lending-NAFCU has long advocated for member business lending reform via legislation and through regulatory relief from the NCUA. The NCUA’s revised MBL rule, backed by NAFCU, went into full effect Jan. 1. This revision removed many prescriptive underwriting and personal guarantee requirements and eliminated the overly burdensome waiver process. However, the NCUA and its MBL rule are under attack in a suit filed last September by the Independent Community Bankers of America.
NAFCU will continue to vocally support the NCUA and the legality of its MBL rule. In the coming year, NAFCU will also continue to work with Congress to advance legislation to provide relief from the statutory, arbitrary MBL cap.
- Obtain clarity for CUs on Military Lending Act requirements-The Department of Defense amended its Military Lending Act regulation in 2016. The MLA was created to enhance protections for members of the armed services and their dependents in consumer credit transactions and to establish a Military Annual Percentage Rate cap of 36 percent. NAFCU will continue to urge DoD to release additional MLA compliance guidance, clarify and amend the text of the final rule, and push back the credit-card compliance deadline one year beyond the current deadline of Oct. 3, 2017.
- Prevent unnecessary rules on overdraft and payday lending-The CFPB has listed overdraft on its rulemaking agenda and has indicated to NAFCU that it plans to issue an overdraft outline of proposals under consideration in early 2017. While the future of any CFPB rule is uncertain with the change in administration, NAFCU will remain vigilant in protecting credit unions’ ability to provide overdraft services and small-dollar loans to their members.
- Ensure clarity, minimize burdens for CUs during CECL implementation-Last June, the Financial Accounting Standards Board issued its long-expected final “current expected credit loss” accounting standard update. The final standard included a number of changes NAFCU advocated for, including measures to make the standard scalable and an extended implementation period for credit unions. NAFCU will continue to work with the NCUA to minimize the burden of implementation.
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.