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CREDIT UNION FACTS

  • 125 million American consumers (nearly 13 million in California and more than 370,000 in Nevada) rely on credit unions for their financial wellbeing.
  • Credit unions are doing everything in their power to aid members and communities. This comes from our commitment to service.
  • Every day — before this crisis and now during this crisis — we advance our not-for-profit, collaborative mission.
  • Our 7.5 percent of the entire financial services marketplace means there is always more we can do.
  • Nationally, we provide $18.9 billion in direct and indirect benefits to the consumer, outweighing our $1.9 billion price tag for the credit union tax status.
  • Credit unions pay nearly $20 billion annually in local, state, and other federal taxes.
  • Credit unions also serve underserved markets and keep assets local as for-profit lending has shifted from Main Street to Wall Street.
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CONGRESSIONAL OVERVIEW

Thank you for attending the 2021 CUNA-Leagues Governmental Affairs Conference (GAC). This virtual program is different than anything we, as an association and collective, have done. However, it is very necessary given the trying and challenging times of this pandemic. Under new majorities, Washington has begun to function — and financial institutions are very much a part of the discussion.
 
As we have adapted to this virtual format, please note that credit unions are not the only group advocating remotely (something to keep in mind as we often feel we’re the only group with this level of advocacy). Most Members of Congress are working from their homes or district offices with few in-person staff. In D.C., staff are working from home and are connected to their Members, lobbyists, and constituents on a regular basis. As the COVID-19 vaccines continue to roll out, most Members of Congress (that opt for vaccination) have been offered the opportunity, and some staff have received it for continuity purposes.
 
The remote work environment has increased email traffic considerably. Offices and Members are much more accessible during this time, but there are moments of high-volume communications that make accessibility somewhat difficult. Bandwidth and attention for issues not entirely relevant to the Member seem to fall to a secondary level.
 
Additionally, the House of Representatives has retained its policy of remote hearings and proxy voting. In some ways, the House is now always (sort of) in session. The Senate still requires in-person voting and offices are open. However, the capitol complex is closed to non-staff.
 
With the 117th Congress under way, the question is: Does the Biden Administration — during a pandemic, recession, and period of addressing social justice issues and a deeply divided country — have the bandwidth to balance massive national problems with limited hours each day. For the banking sector, our survivability depends on Congress and Regulators acting proportionally to the problem. Credit union leaders should be mindful of our messaging as this year’s GAC will define our industry for the next few years (at least in the eyes of our government).
 
Credit unions begin with the notion that many of our immediate issues (not all) have been addressed in the last Congressional stimulus bill. The booking of Troubled Debt Restructures has been delayed until 2022. Borrowing authority under the National Credit Union Administration’s Central Liquidity Facility has also been extended. Paycheck Protection Program loans (grants) have been offered a path to forgiveness, not to mention PPP’s most recent second round. Our challenge now is to address the remaining needs for credit unions, as well as build upon important positions we’ve routinely advocated for (our charter, data security needs, and more).
 
A few overview reminders:
  • These meetings are about credit union issues. Credit union leaders are passionate about many causes and efforts. We need to focus on credit unions and serving our members.
  • Briefing Congressional Members and Staff about your credit union’s financial relief programs and COVID-19 response, while on the surface may seem moot, is absolutely critical to our legislative and political success. In short, they don’t know if you don’t tell them.
  • Our legislative “asks” are tied to playing the long-term game. Credit unions can play offense, defense, and fill stadiums at the same time.
  • For those who have not participated in virtual meetings before, this is a different format and one that still yields results with our Congressional delegation.
 
Please remember to thoroughly review the details below, especially about conducting a virtual meeting. Our messaging focuses on current needed solutions and the future.
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CONGRESSIONAL DELEGATIONS


As a reminder, our delegations have 53 House seats from California and four from Nevada — all of which have some role linked to our presence in the communities they represent. Each state has two Senators. California has our newest Senator, Alex Padilla, who has a strong history of being a credit union champion. In 2022, Senator Padilla and Nevada Senator Catherine Cortez Masto will be up for reelection. Senator Cortez Masto is a leading member of the Senate Banking Committee and a member of the Senate Democratic Leadership team. She has quickly risen in the ranks.
 
Both states have our delegations sworn in and assigned to their committees. As of now, no Members have announced retirements, but the Leagues anticipate a few once reapportionment and redistricting commences.
 
Rep. Maxine Waters (D-Los Angeles) is the Chairwoman of the House Financial Services Committee (the home turf for credit unions), and Rep. Brad Sherman (D-Sherman Oaks) remains the subcommittee Chairman of Investor Protection, Entrepreneurship and Capital Markets. Rep. Katie Porter (D-Irvine) has lost her seat on the Financial Services Committee. With the Democrats losing seats in the House, the juggling of committee assignments had little impact on California. Freshman offices were not awarded any of the three “A-list” committees of which credit union issues typically fall into: Financial Services, Energy and Commerce, and Ways and Means.
 
Speaking of the Ways and Means Committee, which controls taxation policy, Rep. Mike Thompson (D-Napa) is the Chairman of the subcommittee on Select Revenue (taxes), and Linda Sanchez (D-Cerritos), Judy Chu (D-San Gabriel), Jimmy Panetta (D-Salinas), Jimmy Gomez (D-Los Angeles), Steven Hosford (D-North Las Vegas) and Devin Nunes (R-Tulare) all retained their seats. They will be very relevant players in our messaging going forward.
 
Congressional committee assignments for California and Nevada can be found below (scroll down to “CONGRESSIONAL STAFF & COMMITTEES” area).
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PREPARING FOR VIRTUAL CONGRESSIONAL MEETINGS
 

The Leagues encourage you to use the following important facts and figures in preparing for your Congressional visits. Drafting a one-page “leave behind” sheet with this information can be very effective. Plan to email this to the staffer following the meeting.
 

Your ‘Leave Behind’ Should:

  • List any basic “pedigree” information about your credit union: size, membership, charter type, assets, basic product offerings and branch locations.
  • Offer to be a resource for constituent case work dealing with COVID-19 pandemic financial issues.
  • Contain information on the number of forbearances, payment deferrals, loan modifications, and everything your credit union has done to-date to guide your members through the pandemic.
  • Detail benefits of our tax exemption, showing your credit union’s give-back and direct return of value to your members and the community. Please categorize this area as “financial well-being.” Policymakers expect entities to demonstrate how they are serving their constituents during the pandemic (and beyond).
  • Include your name, phone number, and email address — all in large font (16-point recommended).
 
The Leagues’ meeting script (provided below) will outline the basics, allowing you to then offer information about legislative impacts on your credit union. Our advocacy team will ensure follow-up. Each Congressional meeting will run 25 – 30 minutes. REMINDER: Team leaders are assigned by the Leagues as guides to help maximize your time spent, and everyone is encouraged to speak and participate.
 
Your “leave behind” document should be emailed to the Congressional staffer as a follow-up from the meeting. Please include any credit union data that you mention in the meeting. You can find your California or Nevada congressional staffer below (scroll down to “CONGRESSIONAL STAFF & COMMITTEES” area).
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LEGISLATIVE ISSUES

As we have done prior to and throughout the COVID-19 pandemic, the Leagues routinely meet with Members of Congress to discuss all legislative matters related to credit unions. Most Members and Staff have been briefed on our short-term, mid-range, and long-term goals. Individual copies of the California League and Nevada League “priorities” letters can be viewed below (scroll down to “CALIFORNIA LEAGUE’S PRIORITIES LETTER” or “NEVADA LEAGUE’S PRIORITIES LETTER” areas). This is the same letter that will be sent to Congressional Staff ahead of time. Simultaneously, the meeting script provided below (along with your state’s priorities letter to Congressional Staff) will reflect almost identical messaging. Everyone should read their state’s priorities letter ahead of meetings to best understand how to guide their meetings.
 
Please set a calendar reminder for our virtual meeting briefing on Feb. 24 from 11 a.m. – 12:30 p.m. (Pacific)
 
This GAC will focus on the following issues:
 
  • Pandemic response and protecting our members’ financial well-being.
  • Legislative concepts that credit unions support.
  • Protecting consumers’ data.
 
This background information is provided for you to understand the issues, and the meeting script we will provide is a summary of all this information. The “sound bites” are for items that may answer a specific question, should they come up.
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LEGISLATIVE BACKGROUND & DETAILS

 

Pandemic Response and Protecting Members’ Financial Wellbeing 

For more than 85 years, credit unions have been operating under the guise of a regulatory scheme that has evolved through legislative and regulatory action. The intention is to allow credit unions to grow while protecting the safety and soundness of our members’ funds. As the ebb and flow of regulations increase, what holds credit unions to their mission is the fundamental belief that a volunteer-operated cooperative benefits the consumer in the financial services marketplace. Regardless of size and service of a credit union, that fundamental foundation and commitment has not changed.
 
Today, 125 million American consumers (nearly 13 million in California and more than 370,000 in Nevada) continue to choose credit unions as their financial services partner that puts their financial well-being first. Credit unions continue to advance our not-for-profit, collaborative mission pre, during and post-pandemic. We invest in the financial health and security of every community. Credit unions remain committed to ensuring that our members have access to safe, affordable services that work on behalf of their individual needs and help them achieve their financial goals. We continue offering our value to our communities and those that give us the power to exist.
 
Credit unions continue to meet the challenges of the COVID-19 pandemic, providing our members quality financial services that keep them out of default, in their homes and vehicles, and offer every service possible to survive this public health crisis. Credit unions do right by our members because it is our model. As a volunteer-operated cooperative, Congress continues to support our tax-exempt status — which supports our mission. It is estimated that credit unions return $18.9 billion annually to credit union members across the country through higher savings rates, lower loan rates, and fewer fees. This figure does not include the indirect benefit consumers receive regardless of credit union membership.
 
Credit union executives know their individual pandemic responses and should be prepared to share them with Members and Staff. Some recommended data points to prepare are:
  • Number of forbearances, payment deferrals, and their status (as well as the frequency of requests).
  • How many of your members that were in forbearance still paid.
  • Actual losses for autos, credit cards, signature loans, etc.
  • What you see on the horizon going into 2021.
  • Grand total of fees waived and the impact on your credit union.
  • Totals of Paycheck Protection Program loans and grants (if participating).
 
As you are providing this information, please consider that few elected Members or Staff have worked at a financial institution and understand the day-to-day operations. They need to know the credit union response from a quantitative and anecdotal perspective, and they need it in 10 words or less! Avoid getting technical and using acronym-based terms. Also, please avoid saying “income” or “fees” — unless referencing how your credit union has suspended them. 
 
IMPORTANT: While stimulus checks, deposit growth, and return on assets has put pressure on net-worth, please make a note to avoid implying stimulus checks are “bad.” Rather, use the opportunity to explain the difference between a credit union and other depositories, and where the NCUA has not followed suit with regulatory counterparts. The average Congressional Staffer does not understand or know the operations of net-worth or prompt corrective action — and in fact, most will use the terms “capital” and “liquidity” interchangeably without knowing the difference. When stating your credit union is $1 billion in assets, it is likely the Staffer will think you have $1 billion in a vault. Please be patient in understanding that the average Congressional Staffer is under 35 years of age and handling multiple issues for the Member. Members of Congress also frequently interchange “liquidity” and “capital” too.
 
This portion of the meeting is to bring facts to the table about our mission, tax status and pandemic response. The objective is to brief the Member or Staff on the banking and lending conditions in their district of which they may not be aware.
 
If the Representative or Staff request a specific action to aid credit unions in the ability to provide additional services, the answer “yes.” Policy proposals are currently under development, and the Leagues and CUNA will be in touch once they have been finalized. This is your queue to move to the next section.
 
Our “Ask” of Congress:
  • Credit unions continue to be a valuable resource for the communities we serve and can aid constituents with case-work troubles. Please consider us a resource as your constituents report financial problems, seek advice, or ask for counseling.
 

Modernize the Credit Union Charter to Allow for Greater Financial Inclusion

Credit unions are committed to changing the lives of our 125 million members by aiding them in achieving their financial goals. Increasing access to both the credit union itself and our products will allow for greater economic equity and expansion.
 
The nation’s more than 5,200 credit unions are committed to enhancing financial inclusion in our not-for-profit financial cooperatives. This commitment manifests itself in several ways, including breaking down barriers to accessing credit and ensuring financial services remain affordable.
 
Credit Union Access
To expand consumer access to more banking options, credit unions suggest Congress review our statutorily defined charter restrictions. The most notable of these is our required field of membership (FOM).
 
With our financial infrastructure already in place and given our long history of serving communities, credit unions could proudly offer banking services to all — if they were not limited by archaic field-of-membership restrictions. Under current requirements, consumers must qualify under a common bond, such as their employer or geographic location. Credit unions are currently required to refuse banking services to many underbanked individuals and underserved communities who are not in their field of membership.
 
When it was first adopted as an industry practice more than a century ago, field of membership was a tool that credit unions used to determine a member’s creditworthiness. The idea was that if a member worked on a factory line or lived in the same neighborhood as other credit union members, the membership could better assess whether the member was a worthy credit risk. Today, not only do more sophisticated credit underwriting tools exist, we believe it is unlikely Congress would create a system that allows a financial institution to only serve a limited self-selected group of people at the exclusion of all other groups. Such a concept certainly opposes the goals of expanding access and equity in the financial services sector.
 
Congress should explore taking a more inclusive approach to credit union membership, which would give credit unions the ability to expand offerings if they have the ability to do so.
 
Credit Union Products and Services
Credit unions are seeking additional measures to update their operating charter and products offered. Because state legislatures advance policy more succinctly, state charters have advanced ahead of the Federal Charter. The following measures would allow credit union members enhanced access to products and increase competition in the financial sector. They include:
  • Providing small business lending opportunities that are often too small for other larger depository lenders. Credit unions support a one-year moratorium of the member business lending cap. This will allow small businesses additional lines of credit and help spur new job growth. It is estimated this measure could create $5.5 billion in economic activity and 50,000 new jobs without costing the taxpayer a dime. Mr. Sherman introduced this bill last session with Chairwoman Waters as co-sponsor.
  • Increasing loan maturity limits for Federal Credit Unions. There was legislation in the last Congress that would amend the Federal Credit Union Act to provide the National Credit Union Administration with additional flexibility to allow for this. NCUA would have authority to increase maturity limits to 20 years. In addition, the NCUA would have the authority to increase maturity limits of one-to-four unit, non-owner occupied loans to 30 years.
 
While additional charter bills are anticipated throughout the year, these are the immediate priorities early this session.
 
Our “Ask” of Congress:
  • Be on the lookout for “Dear Colleague” letters announcing the introduction of these efforts and consider being a co-sponsor to legislation.
 
The Leagues’ team will be in touch with the offices as the bills are introduced.
 

Protecting Consumers’ Data

The Solar Winds data breach last year is yet another reminder of the fragility of the security and privacy regime protecting Americans’ personal data.
 
Credit unions strongly support the enactment of a national data security and data privacy law that includes robust security standards applying to any entity that collects or holds personal data and is preemptive of state laws. We firmly believe that there can be no data privacy until there is strong data security.
 
With that in mind, credit unions call on Congress to pass a robust national data security standard that would cover all entities that collect consumer information and hold those jeopardizing that data accountable through regulatory enforcement. Securing and protecting consumers’ data is important not only for their individual financial health, but as a further safeguard against rogue international agents and interference by foreign governments.
 
Several new subcommittees have been added to examine the safety net, or lack thereof, in the data security and privacy regime. Credit unions are hopeful this will lead to some resolution.
 
Our “Ask” of Congress:
  • Regardless of committee assignment and regardless of position, your constituents are routinely victims of data breaches that have plagued our nation for more than a decade. It is time for Congress to pass a strong pro-consumer data protection and notification law. Please work with your colleagues across the aisle and let us know if you have a particular interest in this area.
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CREDIT UNION SOUND BITES


Below are some suggested sound bites and elevator-speech messages that will be useful for your conversations with Members and Staff. Please fill in your data, but do not feel it has to be accurate to the exact percent. In fact, a good sound bite is to acknowledge you are “rounding” on the data.
 

Financial Well-Being and Inclusion

Credit unions provide accessible and affordable basic financial services to people of all means and encourage the equitable distribution of capital across all individuals, families, communities and small businesses. Our mission enables us to continue the work of improving our members’ financial well-being and advancing the communities they serve. Congress can improve on this by removing operational barriers, modernizing the credit union charter, and eliminating archaic rules designed to exclude participation in a credit union. 
 

Operations

Credit unions have always been essential services since day-one of the initial COVID-19 shelter-in-place orders. As an essential service, our branch lobbies may have been closed or limited but our doors remained open. No credit union member was denied access to their funds. We have adapted our policies consistent with the guidance and proclamation of our state and local governments.
 

Deferments

Credit unions will always do right by our members. That is what we stand for and what we do. Each individual member’s need is different, and that is why we are able to offer a variety of solutions. Much like regulation, a one-size approach does not fit all.
 

Paycheck Protection Program (PPP)

Participating credit unions continue to navigate the process of offering PPP loans for small businesses. We supported legislation to offer forgiveness and a new round for qualifying businesses. While not all credit unions were able to offer PPP loans, credit unions continue to meet the needs of our members working at Main Street businesses. 
 

Small Business Lending: Member Business Lending

Credit unions continue to support legislation that would grant a one-year freeze from the credit union member business lending cap. We estimate this reprieve would generate about $5.5 billion in economic growth and 50,000 new jobs. Legislation on this issue is pending introduction.  
 

Stimulus Checks: Impact on Net Worth

Credit unions are experiencing a high volume of deposits as consumers receive stimulus checks or Economic Impact Payments. Because of our unique structure, deposit growth can put strain on credit union balance sheets that brings about unnecessary regulatory scrutiny. We are speaking with the Financial Services and Senate Banking Committees about this issue, as no healthy credit union should be penalized because of federal stimulus payments. We may be in touch with all offices for assistance on this front.
 

Tax Status

Our concern is not a single bill to tax credit unions. We are concerned that when the time comes due to pay for the nation’s economic response to the COVID-19 pandemic, the credit union tax status will look like an easy revenue genitor. We need Congressional leaders to be prepared to step up and speak up for credit unions, recognizing the role we continue to play in the community. Whether it was PPP, being “essential” and open, ensuring stimulus checks were whole, or keeping money in accounts when state unemployment offices could not process unemployment checks, credit unions were — and are — there for our communities.
 
The “cost” of the credit union tax status amounts to five budget hours of running the U.S. government out of a whole calendar year. Meanwhile, credit unions return $18.9 billion annually to communities nationally each year. Regardless of size and scope, a credit union is a not-for-profit, cooperative financial institution, operated by volunteers and owned by those that use it.
 

Charter Bills

Credit unions understand the realities of legislating in this environment. We know there are large national priorities coming out of the pandemic from the health care crisis to social justice issues. We want to be a solution and aid our communities. Supporting new charter bills will ensure credit unions can bring financial inclusion to new levels while ushering equitable financial well-being.
 

Postal Banking

To expand consumers’ access to more banking options, credit unions adamantly support and are diligently working toward the goal of expanding banking access. However, we have grave reservations about proposals to leverage the United States Postal Service or create a public bank to achieve this goal. 
 

Cannabis Banking

Providing financial services for cannabis-related businesses is a choice for each individual credit union, and only a few are offering these services until there is a change in federal law. Credit unions nationally support the SAFE Banking Act, as well as the STATES Act, both which would takes steps to provide a safe-harbor on this product line.
 

Government Sponsored Enterprises (GSEs)

Housing and banking policies are inherently tied together. Whether a credit union participates in the GSEs or not, their lending standards are almost guaranteed to match. Credit unions are concerned about any potential policy that would make it difficult for them to participate in the GSE market or exclude smaller issuers from this space. Congress should ensure that all lenders, regardless of volume, should be eligible for participation if the parties mutually agree to do so.
 

Community Development Financial Institutions (CDFIs)

Credit unions continue to support an increase in the annual appropriations for CDFI funding. Traditionally, the range has been in the nature of $200 – $300 million. The stimulus package signed into law in December of 2020 allotted a one-time appropriation of $12 billion. We support continued expansion in this space, with the goal of serving low income communities and people of modest means.
 

Not Covered (or Miscellaneous)

We can circle back with an answer to provide accurate information on any subject that is not covered here. Jeremy Empol with our trade association — the California Credit Union League or the Nevada Credit Union League — will be in touch in the days ahead.
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CONGRESSIONAL MEETING SCRIPT
 

Pandemic Response and Protecting Members’ Financial Well-Being (15 minutes)

  • Credit unions have been operating under rules and regulations with the intent to allow us to grow while protecting the safety and soundness of our members’ funds.
  • What holds credit unions to their mission is the fundamental belief that a volunteer-operated cooperative benefits the consumer in the financial services marketplace.
  • Regardless of size and service of a credit union, that fundamental foundation and commitment has not changed.
  • Today, 125 million American consumers (nearly 13 million in California and more than 370,000 in Nevada) continue to choose credit unions as their financial services partner.
  • We invest in the financial health and well-being of every community.
  • We remain committed to ensuring that our members have access to safe and affordable services that work for their individual and financial goals.
  • Credit unions do right by our members because it is our model.
  • As a volunteer-operated cooperative, Congress continues to support our tax-exempt status — which supports our mission.
  • It is estimated that credit unions return $18.9 billion annually to credit union members across the country through higher savings rates, lower loan rates, and fewer fees.
  • This figure does not include the indirect benefit consumers receive regardless of credit union membership.
  • Credit unions continue to meet the challenges of the COVID-19 pandemic.
  • We continue to advance our not-for-profit, collaborative mission pre, during and post-pandemic.
  • We are keeping our members out of default, in their homes and vehicles, and providing them with every service possible to survive the public health crisis from the pandemic.
  • Our response to the pandemic includes:
    • Forbearances, payment deferrals, PPP loans, fees waivers, etc.
    • We are here, serving your constituents every day, meeting them where they are at.
    • We are a resource for your constituents and our communities.
 
Our “Ask” of Congress:
  • Credit unions continue to be a valuable resource for the communities we serve and can aid constituents with case-work troubles. Please consider us a resource as your constituents report financial problems, seek advice, or ask for counseling.
     
  • Please always ensure credit unions remain as your locally owned financial cooperatives by making sure our tax status remains untouched when the “pay-fors” come due from this pandemic.
 

Modernize the Credit Union Charter to Allow for Greater Financial Inclusion (5 minutes)

  • Our commitment to financial well-being means we are committed to changing the lives of our 125 million members.
  • To do this, we support increasing access to both the credit union itself and our products.
  • This will allow for greater economic equity and expansion.
  • The nation’s 5,300 credit unions are committed to enhancing financial inclusion in our not-for-profit financial cooperatives.
  • Credit union access:
    • Credit unions could proudly offer banking services to all — if they were not limited by archaic field-of-membership restrictions.
    • Current requirements are that consumers must qualify under a common bond, such as their employer or geographic location.
    • Credit unions are currently required to refuse banking services to many underbanked individuals and underserved communities that are not in their field of membership.
    • This is counter toward our mission.
    • When it was first adopted as an industry practice, field of membership was a tool that credit unions used to determine a member’s creditworthiness.
    • Today, more sophisticated credit underwriting tools exist and are thoroughly regulated.
    • Congress would not re-create a system that allows a financial institution mandate exclusion.
    • Such a concept certainly is oppositional to the goals of expanding access and equity in the financial services sector.
 

Credit Union Products and Services (5 minutes)

  • Credit unions are seeking additional measures to update our operating charter and products offered.
  • State legislatures advance policy more succinctly, leaving the federal charter behind.
  • These measures would allow credit union members enhanced access to products and increase competition in the financial sector. Examples include:
    • A one-year moratorium of the member business lending cap in response to the pandemic. This will allow small business additional lines of credit and help spur new job growth. It is estimated this measure could create $5.5 billion in economic activity and 50,000 new jobs without costing the taxpayer a dime.
    • Mr. Sherman introduced this bill last session with Chairwoman Waters as co-sponsor.
    • There was legislation in the last Congress to provide the National Credit Union Administration with additional flexibility to allow for increasing loan maturity limits for Federal Credit Unions.
    • NCUA would have authority to increase maturity limits to 20 years. In addition, the NCUA would have the authority to increase maturity limits of one-to-four unit, non-owner occupied loans to 30 years.
  • Additional charter bills are anticipated throughout the year. These two are immediate priorities early this session.
 
Our “Ask” of Congress:
  • Congress should explore taking a more inclusive approach to credit union membership, which would give credit unions the ability to expand offerings by removing field-of-membership restrictions.
     
  • Congress should modernize Federal Credit Unions to allow for greater maturity limits on non-mortgage loans.
     
  • Congress should grant credit unions a one-year reprieve from the member business lending cap to allow for greater access to small-business job and economic growth.
     
  • Be on the lookout for “Dear Colleague” letters announcing the introduction of these efforts and consider being a co-sponsor to legislation.
 

Protect Consumers’ Data (5 minutes)

  • The Solar Winds data breach last year is yet another reminder of the fragility of the security and privacy regime protecting Americans’ personal data.
  • Credit unions strongly support the enactment of a national data security and data privacy law that includes robust security standards applying to any entity that collects or holds personal data.
  • This should also include preemption of state laws, which have 50 different compliance requirements.
  • We firmly believe there can be no data privacy until there is strong data security.
  • Credit unions call on Congress to pass a robust national data security standard that would cover all entities that collect consumer information and hold those jeopardizing that data accountable through regulatory enforcement.
  • Securing and protecting consumers’ data is important not only for their individual financial health, but as a further safeguard against rogue international agents and interference by foreign governments.
  • Several new subcommittees have been added to examine the safety net, or lack thereof, in the data security and privacy regime. Credit unions are hopeful this will lead to some resolution.
 
Our “Ask” of Congress: 
  • Regardless of committee assignment and regardless of position, your constituents are routinely victims of data breaches that have plagued our nation for more than a decade. It is time for Congress to pass a strong pro-consumer data protection and notification law. Please work with your colleagues across the aisle and let us know if you have a particular interest in this area.
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CALIFORNIA LEAGUE’S PRIORITIES LETTER


California credit union leaders can prepare by reviewing the California Credit Union League’s priorities letter (sent to House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy). It addresses credit union “asks” of Congress regarding:
  • Our Pandemic Response and Protecting Members’ Financial Well-Being
  • Modernizing the Credit Union Charter to Allow for Greater Financial Inclusion
  • Protecting Consumers’ Data
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NEVADA LEAGUE’S PRIORITIES LETTER


Nevada credit union leaders can prepare by reviewing the Nevada Credit Union League’s priorities letter (sent to Senators Catherine Cortez Masto and Jacky Rosen). It addresses credit union “asks” of Congress regarding:
  • Our Pandemic Response and Protecting Members’ Financial Well-Being
  • Modernizing the Credit Union Charter to Allow for Greater Financial Inclusion
  • Protecting Consumers’ Data
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CA & NV CONGRESSIONAL APPOINTMENTS (UPDATED ROUTINELY)


Click here and scroll to view your California or Nevada Congressional appointment schedule (date/time and Congressional office). If you see a blank entry for your appointment, please be patient. This file will be routinely updated leading into GAC (and during GAC if there are scheduling changes for some offices). For the most current information, please refresh your browser before viewing.
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CA CONGRESSIONAL STAFF & COMMITTEES


CA
Sen. Dianne Feinstein (Democrat)
Committees: Rules and Administration; Appropriations; Intelligence; Judiciary
Schardin, Justin — justin_schardin@feinstein.senate.gov (Legislative Assistant/Economic Policy Adviser)
 
CA
Sen. Alex Padilla (Democrat)
Committees: Environment and Public Works; Judiciary; Budget; Rules and Administration; Homeland Security and Governmental Affairs
(staff position filled soon)
 
CA-1
Rep. Doug LaMalfa (Republican)
Committees: Agriculture; Transportation and Infrastructure
Scott, Riley — riley.scott@mail.house.gov (Legislative Correspondent)
Veale, John — john.veale@mail.house.gov (Legislative Director)
 
CA-2
Rep. Jared Huffman (Democrat)
Committees: Transportation and Infrastructure; Natural Resources; Climate Crisis
Ferree, Logan — logan.ferree@mail.house.gov (Deputy Chief of Staff)
Sciascia, Jordan — jordan.sciascia@mail.house.gov (Legislative Assistant)
 
CA-3
Rep. John Garamendi (Democrat)
Committees: Armed Services; Transportation and Infrastructure
Bottoms, Bradley — bradley.bottoms@mail.house.gov (Chief of Staff)
 
CA-4
Rep. Tom McClintock (Republican)
Committees: Budget; Judiciary; Natural Resources
Campbell, Kyle — kyle.campbell@mail.house.gov (Legislative Assistant)
 
CA-5
Rep. Mike Thompson (Democrat)
Committee: Ways and Means
Van Tassell, Melanie — melanie.rhinehart@mail.house.gov (Chief of Staff)
 
CA-6
Rep. Doris Matsui (Democrat)
Committee: Energy and Commerce
Clark, Robert — robert.clark@mail.house.gov (Legislative Assistant)
 
CA-7
Rep. Ami Bera (Democrat)
Committees: Foreign Affairs; Science, Space, and Technology
Bruce, Emma — emma.bruce@mail.house.gov (Legislative Assistant)
 
CA-8
Rep. Jay Obernolte (Republican)
Committees: Budget; Science, Space, and Technology; Natural Resources
Hicks, Rob — Rob.Hicks@mail.house.gov (Legislative Director)
 
CA-9
Rep. Jerry McNerney (Democrat)
Committees: Energy and Commerce; Science, Space, and Technology
Hernandez, Lauren — lauren.hernandez@mail.house.gov (Legislative Assistant)
 
CA-10
Rep. Josh Harder (Democrat)
Committees: Agriculture; Appropriations
Amador, Adela — adela.amador@mail.house.gov (Deputy Chief of Staff/Legislative Director)
 
CA-11
Rep. Mark DeSauliner (Democrat)
Committees: Rules; Transportation and Infrastructure; Oversight and Reform; Education and Labor
Jackson, Sarah — sarah.jackson@mail.house.gov (Legislative Director)
 
CA-12
House Speaker Nancy Pelosi (Democrat)
Lizarraga, Jaime — jaime.lizarraga@mail.house.gov (Senior Legislative Assistant)
 
CA-13
Rep. Barbara Lee (Democrat)
Committees: Appropriations; Budget
Damavandi, Samira — samira.damavandi@mail.house.gov (Legislative Assistant)
 
CA-14
Rep. Jackie Speier (Democrat)
Committees: Oversight and Reform; Armed Services
Marshall, Rachel — rachel.marshall@mail.house.gov (Legislative Counsel)
Musser, Alexandria — alexandria.musser@mail.house.gov (Legislative Assistant)
 
CA-15
Rep. Eric Swalwell (Democrat)
Committees: Homeland Security; Judiciary
Adesina, Adeola — adeola.adesina@mail.house.gov (Health Policy Adviser)
 
CA-16
Rep. Jim Costa (Democrat)
Committees: Agriculture; Natural Resources; Foreign Affairs
Fluellen, Ian — ian.fluellen@mail.house.gov (Legislative Assistant)
Hart, Bradley — bradley.hart@mail.house.gov (Legislative Assistant)
 
CA-17
Rep. Ro Khanna (Democrat)
Committees: Armed Services; Agriculture; Oversight and Reform
Gould, Kate — kate.gould@mail.house.gov (Legislative Director)
 
CA-18
Rep. Anna Eshoo (Democrat)
Committee: Energy and Commerce
Henshall, Eric — eric.henshall@mail.house.gov (Senior Legislative Assistant)
 
CA-19
Rep. Zoe Lofgren (Democrat)
Committees: Judiciary; Modernization of Congress; House Administration; Science, Space, and Technology
Clough, Ryan — ryan.clough@mail.house.gov (Senior Counsel)
Kim, Priscilla — priscilla.kim@mail.house.gov (Legislative Assistant)
 
CA-20
Rep. Jimmy Panetta (Democrat)
Committees: Armed Services; Agriculture; Ways and Means
Dennin, Mark — mark.dennin@mail.house.gov (Senior Legislative Assistant)
Marston, Hillary — hillary.marston@mail.house.gov (Legislative Assistant)
 
CA-21
Rep. David Valadao (Republican)
Committee: Appropriations
Dunklin, Jacob — jacob.dunklin@mail.house.gov (Legislative Correspondent)
 
CA-22
Rep. Devin Nunes (Republican)
Committees: Ways and Means; Intelligence
Wagner, Mattheus — mattheus.wagner@mail.house.gov (Legislative Aide)
 
CA-23
House Minority Leader Kevin McCarthy (Republican)
Murphy, Braden — braden.murphy@mail.house.gov (Legislative Assistant)
 
CA-24
Rep. Salud Carbajal (Republican)
Committees: Agriculture; Armed Services; Transportation and Infrastructure
Luce, Shelby — shelby.luce@mail.house.gov (Legislative Assistant)
 
CA-25
Rep. Mike Garcia (Republican)
Committees: Science, Space, and Technology; Appropriations
Tennille, Alan — alan.tennille@mail.house.gov (Deputy Chief of Staff)
 
CA-26
Rep. Julia Brownley (Democrat)
Committees: Transportation and Infrastructure; Veterans’ Affairs; Natural Resources; Climate Crisis
Greenberg, Katie — katie.greenberg@mail.house.gov (Legislative Assistant)
Wagener, Sharon — sharon.wagener@mail.house.gov (Legislative Director)
 
CA-27
Rep. Judy Chu (Democrat)
Committees: Small Business; Budget; Ways and Means
Kovalkoski, Caitlin — caitlin.kovalkoski@mail.house.gov (Legislative Assistant)
 
CA-28
Rep. Adam Schiff (Democrat)
Committee: Intelligence
Jankiewicz, Joe — joe.jankiewicz@mail.house.gov (Legislative Director)
 
CA-29
Rep. Tony Cardenas (Democrat)
Committee: Energy and Commerce
Oo, Olivia — olivia.oo@mail.house.gov (Legislative Director)
 
CA-30
Rep. Brad Sherman (Democrat)
Committees: Foreign Affairs; Science, Space, and Technology; Financial Services
Robilliard, Rob — robert.robilliard@mail.house.gov (Legislative Assistant)
 
CA-31
Rep. Pete Aguilar (Democrat)
Committees: House Administration; Appropriations
Dorner, Evan — evan.dorner@mail.house.gov (Senior Legislative Assistant)
 
CA-32
Rep. Grace Napolitano (Democrat)
Committees: Transportation and Infrastructure; Natural Resources
Sheehy, Joe — joe.sheehy@mail.house.gov (Legislative Director)
 
CA-33
Rep. Ted Lieu (Democrat)
Committees: Judiciary; Foreign Affairs
Boduszynski, Mietek — Mieczyslaw.Boduszynski@pomona.edu (Fellow)
 
CA-34
Rep. Jimmy Gomez (Democrat)
Committees: Oversight and Reform; Ways and Means
Guerreo, Bertha — bertha.guerrero@mail.house.gov (Chief of Staff)
 
CA-35
Rep. Norma Torres (Democrat)
Committees: Rules; Appropriations
Carray, Mariah — mariah.carray2@mail.house.gov (Legislative Assistant)
 
CA-36
Rep. Raul Ruiz (Democrat)
Committee: Energy and Commerce
Yager, Austin — austin.yager@mail.house.gov (Legislative Assistant)
 
CA-37
Rep. Karen Bass (Democrat)
Committees: Judiciary; Foreign Affairs
Kaiser, Khaula — khaula.kaiser@mail.house.gov (Legislative Assistant)
 
CA-38
Rep. Linda Sanchez (Democrat)
Committee: Ways and Means
(staff position filled soon)
 
CA-39
Rep. Young Kim (Republican)
Committees: Small Business; Science, Space, and Technology; Foreign Affairs
Cisneros, Alex — Alex.Cisneros2@mail.house.gov (Legislative Assistant)
 
CA-40
Rep. Lucille Roybal-Allard (Democrat)
Committee: Appropriations
Rodriguez, Ernesto — ernesto.rodriguez2@mail.house.gov (Legislative Director)
 
CA-41
Rep. Mark Takano (Democrat)
Committees: Veterans’ Affairs; Education and Labor
Maturo, Justin — justin.maturo@mail.house.gov (Legislative Director)
 
CA-42
Rep. Ken Calvert (Republican)
Committee: Appropriations
Smith, Chandler — chandler.m.smith@mail.house.gov (Legislative Assistant)
 
CA-43
Rep. Maxine Waters (Democrat)
Committee: Financial Services
Bascumbe, Andres — andres.bascumbe@mail.house.gov (Legislative Counsel)
Fergusson, Patrick — patrick.fergusson@mail.house.gov (Legislative Director)
 
CA-44
Rep. Nanette Barragan (Democrat)
Committees: Homeland Security; Energy and Commerce
Izaak, Joshua — joshua.izaak@mail.house.gov (Legislative Director)
 
CA-45
Rep. Katie Porter (Democrat)
Committees: Natural Resources; Oversight and Reform
Niemasik, Kaylee — kaylee.niemasik@mail.house.gov (Legislative Director)
 
CA-46
Rep. Lou Correa (Democrat)
Committees: Judiciary; Homeland Security; Agriculture
Saroff, Laurie — laurie.saroff@mail.house.gov (Chief of Staff)
 
CA-47
Rep. Alan Lowenthal (Democrat)
Committees: Transportation and Infrastructure; Natural Resources
Gorud, Chris — chris.gorud@mail.house.gov (Chief of Staff)
 
CA-48
Rep. Michelle Steel (Republican)
Committees: Education and Labor; Transportation and Infrastructure
Dana, Arie — arie.dana@mail.house.gov (Chief of Staff)
 
CA-49
Rep. Mike Levin (Democrat)
Committees: Climate Crisis; Veterans' Affairs
Feinswog, Alison — alison.feinswog@mail.house.gov (Legislative Correspondent)
 
CA-50
Rep. Darrell Issa (Republican)
Committees: Judiciary; Foreign Affairs
Wong, Veronica — veronica.wong@mail.house.gov (Chief of Staff)
 
CA-51
Rep. Juan Vargas (Democrat)
Committees: Financial Services; Foreign Affairs
Hinkle, Scott — scott.hinkle@mail.house.gov (Chief of Staff)
 
CA-52
Rep. Scott Peters (Democrat)
Committees: Budget; Small Business; Energy and Commerce
Brown, Baillee — baillee.brown@mail.house.gov (Legislative Director)
 
CA-53
Rep. Sara Jacobs (Democrat)
Committees: Armed Services; Foreign Affairs
Kuhn, Amy — Amy.Kuhn@mail.house.gov (Chief of Staff)
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NV CONGRESSIONAL STAFF & COMMITTEES


NV
Sen. Catherine Cortez Masto (Democrat)
Committees: Finance; Energy and Natural Resources; Banking, Housing, and Urban Affairs; Indian Affairs
Wayman, Carol — carol_wayman@cortezmasto.senate.gov (Legislative Assistant)
 
NV
Sen. Jacky Rosen (Democrat)
Committees: Health, Education, Labor, and Pensions; Aging; Homeland Security and Governmental Affairs; Small Business and Entrepreneurship; Commerce, Science, and Transportation; Armed Services
Renteria, Alejandro — alejandro_renteria@rosen.senate.gov (Policy Adviser)
 
NV-1
Rep. Dina Titus (Democrat)
Committees: Transportation and Infrastructure; Homeland Security; Foreign Affairs
Rosenbaum, Ben — ben.rosenbaum@mail.house.gov (Legislative Director)
 
NV-2
Rep. Mark Amodei (Republican)
Committee: Appropriations
Dierker, Ryan — ryan.dierker@mail.house.gov (Senior Policy Adviser)
 
NV-3
Rep. Susie Lee (Democrat)
Committee: Appropriations
Toy, Lauren — lauren.toy@mail.house.gov (Legislative Assistant)
 
NV-4
Rep. Steven Horsford (Democrat)
Committees: Ways and Means; Budget
Soloman, Feven — feven.solomon@mail.house.gov (Legislative Assistant)
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NCUA BACKGROUND & DETAILS


NCUA Overview

The following outlines top regulatory issues for the National Credit Union Administration (NCUA). While talking points are provided for each of the issues, the best communication method is for you to tell your credit union’s story. Please be prepared to share how any of these issues have, or will, affect your credit union, your members, and your community.
 

Regulatory Burden

We urge all federal financial regulators to consider the burden regulations have had on the credit union industry these past several years, and consequently, consumers. Actions should be taken to streamline current regulations to eliminate antiquated and inconsistent requirements, provide exemptions for credit unions where appropriate, and curb future regulatory requirements.
 
Tailored and focused regulations are especially necessary given the operational pressures caused by the current COVID-19 crisis.
 
In many respects, credit unions are consumers’ and small businesses’ best hope for receiving affordable and fair financial services since their users are also their owners. This key difference — that credit union customers are member-owners — motivates and drives credit unions to do the right thing. This incentive is lacking in the for-profit banking industry.
 

Capitalizing Interest on Mortgage Loans

At its November 2020 meeting, the NCUA board issued a proposal to remove the prohibition on the capitalization of interest in connection with loan workouts and modifications. The proposed change would apply to workouts of all types of member loans, including commercial and business loans. The proposal would allow credit unions to provide borrowers with the option to capitalize interest along with other loan modification options, such as the lowering of loan payments or the interest rate, extending the maturity date, partial principal or interest forgiveness, and other modifications.
 
Credit unions have pushed for such a proposal numerous times since the onset of the pandemic.
 
Our Message to NCUA:
  • We support the proposed change, as we believe it will provide credit unions with a viable option to aid struggling borrowers.
     
  • When does the agency expect to issue a final rule?
 

Asset Thresholds

In December 2020, the Office of the Comptroller of the Currency (OCC), Federal Reserve Board (FRB), and the Federal Deposit Insurance Corporation (FDIC) (“banking agencies”) issued an interim final rule regarding temporary asset thresholds. Specifically, the banking agencies’ interim final rule allows banks, through Dec. 31, 2021 to determine applicability of certain asset-based regulatory thresholds using asset data as of Dec. 31, 2019 if the bank’s assets as of that date were less than its assets on the date as of which the applicability of a given threshold would normally be determined. This regulatory relief would apply to asset-based regulatory thresholds for requirements such as debit card interchange fees and routing, and eligibility for 18-month examinations, among other asset-based requirements.
 
Our Message to NCUA:
  • We encourage NCUA to follow the lead of the federal banking regulators by issuing an interim final rule to provide temporary relief to credit unions as it relates to regulatory compliance based on asset thresholds.
 

National Credit Union Share Insurance Fund (NCUSIF)

As a result of an influx of deposits following the government stimulus to consumers impacted by COVID-19, credit union deposits have swelled and the NCUSIF equity ratio temporarily declined. At its September 2020 board meeting, NCUA reported that the NCUSIF equity ratio had dropped to 1.22 percent in mid-year 2020 from where it was in December 2019 at 1.35 percent. This is an understandable and temporary change reflecting the historically unprecedented deposit growth driven by members depositing COVID-19 Economic Impact Payments.
 
NCUA announced the reasonable and appropriate step of having credit unions “top off” their deposit in the NCUSIF to account for these new deposits. This is expected to return the equity ratio to approximately 1.34 percent, which is above the statutory guideline for the normal operating level (1.30 percent). NCUA is prohibited from assessing premiums to fund the NCUSIF if the equity ratio is above 1.30 percent, and the agency is required to report to Congress a restoration plan if the equity ratio drops below 1.20 percent.
 
Our Message to NCUA:
  • We are concerned that NCUA may take the unnecessary step of assessing credit unions a premium charge if the fund drops below 1.30 percent during this crisis.
     
  • We urge the NCUA to forebear on any assessments, consistent with forbearance toward distressed members that the agency has urged credit unions to embrace. A temporary forbearance approach to the existing NCUSIF equity ratio policy on levying insurance premiums is consistent with the stated approach of the FDIC.
 

Net Worth Relief

Deposits in credit unions have swelled during the crisis, largely as a result of government stimulus and changes in consumer spending and savings habits. Credit unions are increasingly investing these funds in zero- and low-risk assets, such as shorter-term Treasury securities. These deposits and resulting investments, however, have caused a decrease in the net worth ratio for many credit unions.
 
Our Message to NCUA:
  • We urge the NCUA to follow the lead of the federal banking regulators and exclude such investments from the net worth ratio calculation.
     
  • The NCUA has broad authority in defining “total assets,” which comprises the denominator of the net worth ratio. Therefore, we encourage the agency to amend the definition to exclude certain zero- and low-risk assets, which would result in a reduction to the denominator of the net worth ratio.
 

Risk-Based Capital (RBC)

At its January 2021 board meeting, the NCUA board approved a proposed rule that would temporarily raise the asset threshold for defining a credit union as “complex” for purposes of being subject to any risk-based net worth requirement. Specifically, the proposed rule would amend NCUA’s regulations to provide that any risk-based net worth requirement would apply only to credit unions with more than $500 million in assets (currently $50 million) and a risk-based net worth requirement that exceeds 6 percent. This change would remain in place until the RBC rule goes into effect.
 
Our Message to NCUA:
  • We continue to question whether the RBC rule is necessary. To provide credit unions and their members more time to recover from the current crisis, the NCUA should further delay the RBC effective date to, at earliest, Jan. 1, 2023. This delay will allow the NCUA more time to study whether additional changes should be made to these requirements or to forego the initiative altogether, given the new COVID-19 economic environment.
     
  • While we appreciate the recent temporary accommodations the NCUA has made to provide some relief, we believe a delay of the RBC effective date is still warranted.
 

FASB’s Current Expected Credit Loss (CECL)

The Financial Accounting Standards Board’s current expected credit losses (CECL) standard continues to be the biggest compliance issue facing credit unions. Although FASB has delayed the effective date for credit unions (and other non-public business entities) until January 2023, we believe a more proactive and collaborative strategy by the NCUA with industry stakeholders will better ensure credit unions are prepared for this major change as the effective date approaches.
 
Our Message to NCUA:
  • We appreciate NCUA’s determination that credit unions can phase-in the effective date of CECL for regulatory capital purposes, and credit unions are awaiting a final rule. While the ability to phase in CECL for regulatory capital purposes will be helpful in terms of CECL’s initial impact on credit unions’ financials, it will not change the long-term financial impact or ongoing compliance challenge for credit unions.
     
  • Preparation for credit unions to comply with the CECL standard should be one of NCUA’s top priorities. We urge NCUA to focus more on CECL compliance guidance and resources for credit unions.
     
  • We also encourage NCUA to continue to provide input and guidance to FASB on the burden the CECL changes will have on credit union lending and consumer access to credit, particularly for lower-income consumers.
 

Extended Examination Cycle

The NCUA adopted an extended exam cycle for credit unions with assets less than $1 billion. The banking agencies issued an interim final rule in August 2018 to implement extended exam cycles of 18 months for financial institutions with assets less than $3 billion (an increase from $1 billion). 
 
Our Message to NCUA:
  • The banking agencies have an 18-month exam cycle for financial institutions with assets under $3 billion, while the NCUA’s threshold is $1 billion. The NCUA should increase the extended exam cycle eligibility for credit unions consistent with the banking agencies.
 

Streamlines and Virtual Examinations

In March 2020, NCUA made the decision to move to offsite examinations during the COVID-19 pandemic. This approach afforded credit unions with more time and resources to better serve their members during this unprecedented situation.
 
Although the virtual exam approach proved necessary, it was challenging for some credit unions, particularly those with limited experience with such examinations. While we are many months into the operational disruptions caused by the COVID-19 pandemic, we continue to ask NCUA to work with credit unions, especially those that request additional time/flexibility to provide requested documentation and other information.
 
Our Message to NCUA:
  • We want to thank NCUA’s quick action taken in 2020 in adopting a remote exam posture.
     
  • We urge the agency to continue its efforts to streamline examinations and make operations more efficient.
     
  • In addition, we support NCUA’s move toward virtual examinations, provided credit unions have the ability for in-person interaction to allow them to engage with examiners.
 

Cybersecurity

Cyber and data security is one of the biggest issues currently facing most industries, including financial services. NCUA Chairman Todd Harper has said that cybersecurity is also a top concern of his. We appreciate NCUA’s recognition of the importance of this issue and its commitment to make it a focus area.
 
Our Message to NCUA:
  • What changes can credit unions expect in cybersecurity requirements?
     
  • Credit unions continue to be concerned about the depth of knowledge of NCUA’s cyber examiners. What steps is the agency taking to ensure examiner expertise?
     
  • What steps does the NCUA take to secure confidential information about cyber-exams and other intellectual property that could harm a credit union if accessed by a bad actor?
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CFPB BACKGROUND & DETAILS

 

CFPB Overview

The following outlines top regulatory issues for the Consumer Financial Protection Bureau (CFPB). While talking points are provided for each of the issues, the best communication method is for you to tell your credit union’s story. Please be prepared to share how any of these issues have, or will, affect your credit union, your members, and your community.
 

Tailoring Regulations

There are very significant differences between member-owned, not-for-profit credit unions and other financial institutions and lenders that acted irresponsibly in the years leading up to the financial crisis of 2008. In fact, the CFPB has repeatedly said that credit unions did not cause the financial crisis and they operate in a responsible and consumer-friendly manner. However, despite the fact that credit unions are not the bad actors that the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) was passed to address, credit unions are continually swept into one-size-fits-all rules.
 
When Congress passed Dodd-Frank, it specifically recognized the need to appropriately tailor regulations and provided the CFPB with exemption authority. Specifically, Section 1022(b)(3)(a) of Dodd-Frank gives the CFPB authority to “exempt any class of covered persons, service providers or consumer financial products or services” from Title X regulations. Then, in 2016, Congress reinforced this authority in letters to the CFPB signed by 329 Members of the House of Representatives and 70 Senators. These letters clarified Congress’s intent and urged the CFPB to use its exemption authority to ensure regulations do not have the unintended consequences of limiting services or increasing costs for credit union members.
 
Our Message to CFPB:
  • Credit unions are not asking to be exempt from all rules without reason; instead, we ask the CFPB to consider how credit unions are different from other financial service providers and to tailor rules accordingly.
     
  • Rather than drafting rules with a one-size-fits-all approach, the CFPB should draft them narrowly to address those engaged in abusive behavior.
 

COVID-19 Flexibility

Credit unions came into the COVID-19 pandemic in a strong position and are using that strength to step up to the plate for their members and employees. Since the beginning of the pandemic, the CFPB has been proactive in issuing policy statements and acting on several key consumer finance issues, including credit reporting, mortgage servicing, small-dollar lending, remittances, and regulatory reporting extensions. We appreciate the regulatory amendments and supervisory flexibility that the CFPB has provided so far, but more will be needed as the crisis continues.
 
Our Message to CFPB:
  • The CFPB should avoid implementing new rules that would unnecessarily tie-up compliance resources or add to regulatory burden. If a new rule must be finalized, we ask that the compliance date be set far enough into the future as not to distract from the immediate focus, which is credit unions helping members.
     
  • The CFPB should suspend unnecessary onsite examination activities and reduce the frequency of requests for examination-related information so credit union employees can dedicate time to focusing on members.
     
  • The CFPB should expand “good faith efforts to comply” supervisory policies to compliance areas where credit unions are acting swiftly to assist members in need.
     
  • The CFPB should continue to coordinate with other federal banking regulators, especially the NCUA, to update relevant regulatory guidance as more consumers seek mortgage forbearance, debt payment relief, small-dollar loans, and other means of assistance during the COVID-19 pandemic.
 

Remittances

In May 2020, the CFPB issued a final rule to increase the “normal course of business” threshold from 100 to 500 remittance transfers annually. The Leagues and our members have long advocated for an increase in the safe-harbor threshold.
 
The CFPB’s final rule did not address cancellations. However, it is an aspect of the remittance rule that should also be addressed. In general, a sender may cancel a remittance transfer within 30 minutes after the sender pays for the remittance transfer. In practicality, this has resulted in providers delaying the transfer for 30 minutes in order to ensure the sender does not cancel. The CFPB’s own assessment report acknowledges that some banks and credit unions have adopted this practice. This requirement not only contributes to inefficiencies, it causes consumer confusion and frustration.
 
Our Message to CFPB:
  • We thank the CFPB for listening to our concerns and issuing a final rule to increase the safe-harbor threshold.
     
  • We urge the CFPB to increase the safe-harbor threshold to 1,000 remittance transfers per year. This would more appropriately tailor the regulation to affect only those that regularly engage in the remittance-transfers business.
     
  • We urge the CFPB to assess the 30-minute cancellation period and to issue a proposed rule to eliminate this requirement.
 

Home Mortgage Disclosure Act (HMDA)


Reporting Thresholds
In April 2020, the CFPB issued a final rule adjusting the institutional and transactional coverage thresholds for closed-end mortgage loans and open-end lines of credit.
 
Open-End Lines of Credit
Effective Jan. 1, 2022, upon expiration of the temporary threshold of 500 open-end lines of credit, the final rule sets the permanent threshold for open-end loans at 200. In the 2022 calendar year, credit unions that originated at least 200 open-end lines of credit in each of the two preceding calendar years must collect and record data on their open-end lines of credit and report that data by March 1 of the following calendar year.
 
Closed-End Mortgage Loans
As of July 1, 2020, the final rule permanently raised the closed-end coverage threshold from 25 to 100 closed-end mortgage loans in each of the two preceding calendar years.
 
Our Message to CFPB:
  • We appreciate the CPFB revisiting the HMDA rules.
     
  • We urge the CFPB to increase the open-end line of credit and closed-end mortgage loan reporting thresholds to exempt credit unions with smaller mortgage lending portfolios from HMDA reporting.
 

Data Points

In 2019, the CFPB solicited comments on whether to make changes to the data points that the Bureau’s October 2015 rule either ADDED to Regulation C or REVISED to require additional information beyond what was required by Dodd-Frank.
 
Our Message to CFPB:
  • We philosophically oppose the overreach by the CFPB of adding data points and new required information beyond the Dodd-Frank mandate.
     
  • We urge the CFPB to reduce the HMDA data set for all reporters to the data points required by statute.
     
  • We urge the CFPB to reconsider the privacy balancing test used to determine which HMDA data points are made available to the public in favor of consumer privacy. 
 

Ability-to-Repay/Qualified Mortgage Rule

In December 2020, the CFPB issued two final rules amending the Ability-to-Repay (ATR)/Qualified Mortgage (QM) rule in Regulation Z. These final rules are:
  • General QM final rule: Replaces the existing 43 percent debt-to-income (DTI) ratio limit with price-based thresholds.
  • Seasoned QM final rule: Creates a new category of qualified mortgage.
 
Both final rules are effective on March 1, 2021. For the general QM final rule, the mandatory compliance date is July 1, 2021.
 
Our Message to CFPB:
  • We recommend the full implementation of these critical QM changes, which help ensure that our mortgage market remains a bright spot in the economy. Credit unions originated record numbers of mortgages in 2019 and 2020, and these important regulatory updates will help ensure that they will have QM protections as they underwrite safe, sustainable, and affordable mortgages for their members in 2021 and beyond.
 

UDAAP: Defining ‘Abusive’

In January 2020, the CFPB issued an Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) policy statement outlining its approach to the “abusiveness” standard in supervision and enforcement matters. The Leagues and our members have long advocated for the CFPB to clarify the scope and meaning of “abusive.” This policy statement is a step toward ending an “I know it when I see it” approach to the Bureau’s UDAAP authority. The CFPB’s policy statement identifies several key principles:
  • Citing or challenging conduct as abusive in supervision and enforcement matters only when the harm to consumers outweighs the benefit.
  • Generally avoiding “dual pleading” of abusiveness and unfairness or deception violations arising from all, or nearly all, the same facts, and alleging “stand alone” abusiveness violations that demonstrate clearly the nexus between cited facts and the Bureau’s legal analysis.
  • Seeking monetary relief for abusiveness only when there has been lack of a good-faith effort to comply with the law; except, the Bureau will continue to seek restitution for injured consumers regardless of whether a company acted in good faith or bad faith.
 
The policy statement also leaves open the possibility of the Bureau conducting a future rulemaking to further define the abusiveness standard.
 
Our Message to CFPB:
  • We support the Bureau taking steps toward establishing clear standards for, and transparency in, what is considered “abusive” behavior. However, any policy statement on “abusive” should be merely the first step on the path toward greater clarity.
     
  • We recommend the Bureau solicit additional stakeholder feedback on the “abusive” prong of UDAAP.
     
  • The Bureau should clarify that previous enforcement actions or consent orders that conflict with statutory or judicial precedent create no new expectations for compliance.
 

Short-Term, Small-Dollar Lending

Credit unions often provide the safest and most affordable loan options for consumers in need of emergency credit. Consumers’ access to emergency credit is especially important given the current environment as evidenced by the joint statement from the federal banking regulators encouraging financial institutions to provide responsible small-dollar lending in response to the COVID-19 pandemic.
 
Our Message to CFPB:
  • We have long advocated for the rules governing short-term, small-dollar lending to be tailored to address predatory practices in the small-dollar, short-term lending space while not inhibiting credit unions from offering affordable small-dollar products to members in need.
     
  • We recommend the CFPB evaluate the market impact of the 2017 Payday Rule’s payments provisions to determine if regulatory amendments are necessary, and to expand the partial carve-out for the Payday Alternative Loan I program (PAL) to also cover NCUA’s PAL II program.
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