Heading into the GAC, legislative priorities for credit unions include protecting the tax-exempt status, data security and housing finance reform.
“There's a lot of action going on behind the scenes with respect to tax reform. In the House Ways & Means committee, you’ve got members working on draft legislation. Now in the Senate Finance Committee, you’re having a transition to a new chairman who's had his priority as tax reform for some time,” said Ryan Donovan, CUNA's senior vice president of legislative affairs. “It's very much an issue that is in play behind the scenes and frankly, decisions that are made this year about tax reform are really going to influence the outcome of the legislation whenever it's finalized.”
David Osborn, president/CEO of the $1.4 billion Anheuser-Busch Employees’ Credit Union in St. Louis, said he views the industry's tax-exempt status as a crucial battle to win “every year.”
“I think 30% of credit unions would disappear,” Osborn said. “I think it would hit 30% of our bottom line income unless we did some tax avoidance kind of things which don't make good economic sense but would help the bottom line on taxes.”
Donovan added, “Congress is doing something on it right now and if we wait until the last minute to engage, it's going to be to our detriment. We’re sending folks up with our top priority next week to spread the ‘Don't Tax My Credit Union’ message on Capitol Hill. Now, that in itself would justify 4,500 people being here.”
But that's not all. “We’ll also be up there encouraging Congress to enact legislation that requires merchants to hold data using the same type of standards credit unions use, that makes them liable for the losses that are incurred as a result of security breaches and also gives credit unions the ability to notify members where breaches occur,” he said.
Donovan said CUNA also will be encouraging GAC participants to advocate for regulatory relief bills sitting in Congress.
“Our privacy notification bill is pending in the Senate. We feel that we’re very close to getting that through the chamber. We have our IOLTA bill (Credit Union Share Insurance Fund Parity Act) that passed the Financial Services Committee last year that we’re hoping the House will consider early this year,” he said.
CUNA said participants will also be advocating for the Senate to move forward with housing finance reform.
“We all have real concerns about a world in which the secondary mortgage market is occupied by a handful of very large banks. We know it is imperative that any new system facilitates credit union lending so we can continue to be a source of reliable mortgage credit for members,” CUNA said in January. “We will be deeply engaged in this discussion on Capitol Hill, both by testifying at key hearings on housing reform issues and working with our members across the country to impress our message on Capitol Hill to maintain credit union access to the secondary market.”
NAFCU also has vowed to continue its push to preserve access to the secondary mortgage market for credit unions.
“NAFCU will continue to advocate that any reform of the government-sponsored enterprises, Fannie Mae and Freddie Mac, and housing finance overall ensures unfettered and guaranteed access for credit unions to the secondary mortgage market and fair pricing based on loan quality instead of loan volume,” said a NAFCU press release in January.
NAFCU and CUNA both support legislation that would increase the business lending cap, including the Credit Union Small Business Jobs Creation Act, which allows well-capitalized credit unions operating near the cap to increase their business loan offerings to 27.5% of total assets.
“Member business lending is starting to ramp up here. We’re not close to the cap, but two, three or five years down the road, we will be; so we would like to see that cap raised. It's really crazy that before 1998 we didn't have a cap and now we’ve got one. It really makes no sense at all,” Osborn told Credit Union Times.
“I’m really disappointed we didn't win this whole MBL battle prior to the focus on taxation and rewriting the tax code,” the St. Louis credit union CEO continued. “We should have had that out of the way.
“CUNA really needs to get a win or they’re going to have more credit unions like North Carolina State Employees’ Credit Union. A lot of people are going to say, ‘What am I paying dues for if we can't get a win in Congress?’”