The federal Credit Union Act is outdated and needs to bemodernized, CUNA officials said Monday, in announcing acomprehensive effort to send a plan to Capitol Hill during the next Congress.

“It's been about 20 years since the Credit Union Act has beenupdated,” said Ryan Donovan, CUNA's chief advocacy officer. Duringthat time, state laws governing credit unions have changed, as havefederal banking laws.

CUNA's Credit Union Powers Subcommittee has been examining theissue, he said, adding the association also has contacted memberleagues and credit unions to determine areas of the law that areoutdated.

He said, for example, the federal law prescribes when a creditunion's fiscal year begins, adding that some credit unions mightwant to have more flexibility in determining their fiscal years. Hesaid that credit unions might want more flexibility in schedulingtheir board meetings than is allowed in federal law. And creditunions might want more power to expel abusive members.

In addition, he said, any examination of the federal law shouldinclude allowing credit unions to use supplemental capital incertain circumstances and changes to member business lendingrules.

Donovan said that CUNA officials expect that Congress will nottackle such an issue and pass legislation overnight.

“We envision a long game here,” he said, adding that “Weunderstand that something like this takes a long time.”

And he acknowledged that once Congress begins examining theCredit Union Act, CUNA and others will have to be prepared to playdefense to ensure that provisions are not added that will hurt theindustry.

Donovan also outlined several goals CUNA has for 2018. He saidCongress will be considering a technical corrections bill to thetax cut legislation enacted last month, adding that the legislationcould be another forum for a fight over the credit union taxexemption.

He said that the trade group also will push the CFPB to providemore exemptions for credit unions in its rulemaking process. And association officials want to convince the agency that the NCUAshould have the primary supervisory responsibility for large creditunions.

Those efforts have been unsuccessful in the past, but the CFPBwill have a new director following the resignation of RichardCordray. Among the candidates for that job is NCUA Chairman J. MarkMcWatters, who has pushed the CFPB to provide such exemptions tocredit unions.

Donovan also said that CUNA will continue to push plans toenhance payment security to reduce the impact that merchant databreaches have on credit unions and members. He said that CUNA willcontinue to pursue litigation when data breaches occur.