With Congress back in session, there is much work to bedone. The 114th Congress' agenda is teeming with pending bills andamendments. Therefore, it is extremely important that we use everyopportunity to advance credit unions' key issues and the 101million members we represent. 

Legislative Matters

Several bills introduced in Congress relate to regulatory reliefand data security, including:

• The Homebuyers Assistance Act (H.R. 3192), introduced by Rep.French Hill (R-Ark.), would provide a temporary safe harbor forlenders from enforcement of integrated disclosure requirements formortgage loan transactions under the Real Estate SettlementProcedures Act and the Truth in Lending Act through Feb. 1,2016. Sen. Tim Scott (R-S.C.) introduced S. 1711,legislation that would provide a similar legal safe harbor throughJan. 1, 2016.
• The NCUA Budget Transparency Act (H.R. 2287), introduced byReps. Mick Mulvaney (R-S.C.) and Kyrsten Sinema(D-Ariz.), would require the NCUA to provide notice of apublic hearing on its budget and invite comments. It is thecompanion bill to S. 924, introduced by Sens. Dean Heller (R-Nev.)and Mark Warner (D-Va.).
• The Risk-Based Capital Study Act of 2015 (H.R. 2769),introduced by Reps. Stephen Fincher (R-Tenn.), Bill Posey (R-Fla.)and Denny Heck (D-Wash.), seeks to compel the NCUA to quantify thenecessity, legality and impact of the agency's risk-based capitalproposal.
  • The Data Security Act of 2015 (H.R. 2205) was introduced byReps. Randy Neugebauer (R-Texas) and John Carney (D-Del.). The billwould set data protection standards, outline a process for breachnotifications and recognize financial institutions' compliance withthe Gramm-Leach-Bliley Act. It is the companion bill to S. 961introduced by Sens. Tom Carper (D-Del.) and Roy Blunt (R-Mo.).

These bills would deliver significant regulatory relief andtransparency to credit unions, but they won't progress withoutsubstantial support. It is critically important that credit unions– and credit union members – ramp up their own advocacy efforts andurge their U.S. senators and representatives to support these billsand help secure passage. At NAFCU's Congressional Caucus Sept.14-17, credit union leaders can speak with lawmakers directly aboutthese important issues.

Advocacy efforts yield valuable results. Case in point: On June29, 2015, President Obama signed into law bill H.R. 1295,the Trade Preferences Extension Act. It included amanager's amendment from House Ways and Means Committee ChairmanPaul Ryan (R-Wis.) to section 603 of the Act that preserves currentinterest reporting on IRS Form 1099 but increases penalties fornoncompliance. Without this amendment, credit unions, banks andbroker/dealers may have had to report to the IRS their members' andcustomers' information related to all interest-bearing andnon-interest bearing accounts. NAFCU worked diligentlywith other financial trade groups to get this onerous provisionremoved.

Regulatory Matters

On the regulatory side, we have also seen much-needed progressthis year.

In July, President Obama announced the Department of Defense'sfinalization of amendments to its Military Lending Act rule. Thefinal rule allows a credit union to list a toll-free telephonenumber on all consumer credit applications to satisfy oraldisclosure requirements and, when this is done, relieves creditunions' burden of checking the Defense Manpower Data CenterDatabase to determine which borrowers must receive MLA oraldisclosures. MLA caps the interest rate on covered loansto active duty service members at an all-inclusive 36% MilitaryAnnual Percentage Rate, establishes a range of mandatorydisclosures that alert servicemembers to their rights and prohibitscreditors from engaging in certain predatory practices, among otherprotections. The effective date is Oct. 1, 2015, though theregulatory compliance deadline is Oct. 3, 2016.

In June, the NCUA Board proposed NAFCU-sought amendments to theagency's member business lending regulation. This proposalis important because credit unions want to provide funding to smallbusinesses that are struggling to find access to capital andliquidity, and are arbitrarily limited by the NCUA's existingregulation. 

Through this proposal, the NCUA lifts many of thenon-statutorily mandated restrictions from Part 723, whileretaining full regulatory and supervisory authority to addresssafety and soundness concerns on a case-by-case basis. Despitemisplaced banker allegations, the NCUA is acting within itsstatutory authority because Part 723's current prescriptiveunderwriting criteria are not mandated by the FCU Act, and theproposal does not alter the statutory MBL cap. 

Ultimately, we have seen progress, but our legislative andregulatory challenges are far from over. Now is the time tocapitalize on the successes we have gained to ensure that weachieve our ultimate goals of regulatory relief for credit unionsand national data security standards for retailers. 

B. Dan Berger is president/CEO of NAFCU. He can be reachedat 703-522-4770 or [email protected].