Trades Ready Last Minute Pitch for CU Bills
As 2014 comes to an end, credit union trade groups are preparing to make a final inning push for Senate passage of key legislation already approved by the House.
Both NAFCU and CUNA have also vowed to renew their efforts on select bills in the new Congress with data security and protecting the credit union tax exemption topping the list of main priorities for the associations as they head into 2015.
The Privacy Notification Modernization Act, which passed the House, would change current law that requires a privacy notification be sent to a member annually. Under the bill, a credit union would only need to send a privacy notice to members if there has been a change in language from previous year. Both CUNA and NAFCU said the bill would reduce expenses for credit unions.
The Credit Union Share Insurance Fund Parity Act, which awaits Senate action, would direct the NCUA to issue a regulation extending share insurance to owners of funds held in trust accounts opened and managed by credit union members, according to CUNA.
“This bill is a parity bill which provides credit unions the same opportunity as other financial institutions to serve their members and the community,” Ryan Donovan, CUNA SVP of legislative affairs, told CU Times.
The Capital Access for Small Community Financial Institutions Act of 2014 is another piece of legislation supported by NAFCU and CUNA that the Senate has not passed.
CUNA said the legislation would fix a drafting error from a 1989 bill that opened the Federal Home Loan Bank system to commercial banks and federally chartered credit unions. Under the bill, the 130 privately insured credit unions would be able to apply for membership in the Federal Home Loan Bank system.
Donovan said the bill would strengthen privately insured credit unions by offering additional liquidity and enabling them to make more home mortgage loans.
“We have been meeting with folks through the recess on those bills and will continue to push them when Congress returns,” Donovan said.
Jillian Pevo, NAFCU director of legislative affairs, said NAFCU would like to see the Senate act on the House passed Mortgage Choice Act of 2013, which would adjust the calculation of points and fees under the CFPB's Qualified Mortgage rule.
NAFCU is also advocating for Senate passage of the CFPB Rural Designation Petition and Correction Act, which would require the CFPB to set up an application process for a county to request designation as a rural area.
Brad Thaler, NAFCU vice president of legislative affairs, said getting these bills passed before the next Congress begins is an uphill fight.
“We still have some time left this year. We would like to get something done on those since they already passed the House,” he noted.
CU Times asked Thaler if NAFCU plans to advocate for the re-introduction of these bills in the next Congress.
“We’ll try to get them back to the Senate as soon as possible,” he said. “You’ll have a new committee chair so we’ll try to work with him and the new senators there.”
Thaler was also asked why he thinks Senate Majority Leader Harry Reid (D-Nev.), who the trades have considered a credit union supporter, has not acted on the bills.
“Many of these measures are basically candidates to go either as part of a larger package or unanimous consent,” he explained. “Typically, when you are this late in a session, you’re not going to see the Senate actually devote the floor time that they need to debate on these issues. “Usually, a lot of work is done behind the scenes to try to put these into a package and try to get every senator to sign off to let it go by unanimous consent.”
NAFCU said it contributed $5,000 to Reid's re-election campaign in 2010. CULAC said it contributed the $10,000 legal maximum to Reid's re-election campaign and the maximum $30,000 to his leadership PAC as well as $152,535 for an independent expenditure urging his re-election. Since the 2010 election, CULAC has given $6,000 to Reid's 2016 re-election and an additional $20,000 to his leadership PAC.
Thaler said NAFCU has met with Reid's staff to go over options for the lame duck session.
“If we come back in a new Congress and can get these measures to the Senate quickly, they have more time and there's more opportunity to attach them to a bill that's moving,” he said. “The sooner we have measures in the Senate in the new Congress, the more opportunities that we have. It's kind of late in the game now. There's limited opportunities.”
Donovan said the current Congress has not been very efficient when it comes to making law.
“Nevertheless, we have seen favorable progress in terms of protecting the credit union tax status in the first draft of tax reform, preserving credit unions’ interests in housing finance reform and facilitating an unprecedented level of Congressional interest in NCUA's risk-based capital proposal,” he said.
Donovan also floated the possibility of the Republican-controlled House and Senate taking up tax reform.
“That's something we’re going to have to be engaged in,” he said.
Meanwhile, NAFCU is focused on advancing data security issues, lifting the member business lending cap and supplemental capital legislation heading into the next Congress, Thaler pointed out.
Donovan said CUNA's broader legislative agenda for the next Congress is still in development.
“Our agenda will closely align with what credit unions have consistently told us is important to them: preserving the tax status, reducing regulatory burden, enhancing the charter and ending merchant data breaches,” he said.
Joseph Lynyak III, a partner at the international law firm Dorsey and Whitney in its Finance & Restructuring Group, said banking legislation is likely to pass in the next Congress given the Republican majority in both chambers.
“After major banking legislation, there is usually a clean-up or corrections bill that is passed about two years after,” Lynyak said. “This has not happened because of the fear that the Republicans will try to gut the CFPB. Now that the Republicans have control of the Senate, it is likely that they will be able to push a banking bill that the Administration may have difficulty in opposing.”
CUNA President/CEO Jim Nussle, a former Iowa Republican congressman, said voters elected a credit union-friendly majority in the Senate Nov. 4.
“The results are overwhelmingly positive for us despite some hard-fought losses. Credit unions have always stood by our friends in Congress and this election cycle was no different,” he said. “Of the 15 races in which CUNA/CULAC undertook partisan communications and independent expenditures, 10 were successful.”