Advocacy Update

Good morning from Seattle, Washington, where the National Conference of State Legislatures convenes its 2015 Legislative Summit.  Credit unions will have a significant presence at what is the largest gathering of state policymakers in the country.  More on that below, but first, our regularly scheduled program.

Here is what you need to know about credit unions and advocacy this week:
  • CUNA and Leagues will represent America’s Credit Unions at the National Conference of State Legislatures Annual Legislative Summit.
  • Cyber Security Legislation could be considered in the Senate this week.
  • NCUA’s Member Business Lending proposal remains open for comment through the end of the month.
  • The FCC’s Telephone Consumer Protection Act (TCPA) order causes credit unions and others significant concerns.

In Congress

The House skipped town last week, beginning its five-week long August recess.  The Senate remains in session and will have a cloture vote on the motion to proceed to legislation to make Planned Parenthood ineligible for federal funding (S. 1881).  Later this week, the Senate may consider the “Cybersecurity Information Sharing Act of 2015” (S. 754).  When the Senate recesses at the end of the week, they will remain out of session until September 8, when the House is also expected to return.
 
With the House out of session, this week’s hearings are in the Senate.  The Banking Committee plans two hearings, but neither are of particular interest or concern to credit unions:
 
Monday
  • The Senate Banking, Housing and Urban Affairs Committee will hold a full committee field hearing on “Does Securities Investor Protection Corporation Have a Conflict of Interest?”
 
Wednesday
  • The Senate Banking, Housing and Urban Affairs Committee will hold a full committee hearing on “The Implications of Sanctions Relief under the Iran Agreement.”

NCUA’s Member Business Lending Proposal

As you know, NCUA’s Member Business Lending Proposal is open for comment through the end of the month.

The proposed rule would completely overhaul NCUA’s MBL regulation.  Almost all requirements not in the Federal Credit Union Act would be removed.  The proposal would create a category of “commercial” loans for safety and soundness purposes and utilizes the category of MBLs for compliance with the Act’s limitations on member business lending.  For example, the Act does not categorize any nonmember participations as MBLs and neither does the proposed rule.  However, business loan participations are considered commercial loans for the purposes of safety and soundness.  The rule would remove all of the specific requirements that currently require waivers, including the personal guarantee requirement.  It would also exempt some CUs with less than $250 million in assets from the board of director and management responsibility requirements and commercial loan policy requirements.  The proposal has an 18-month implementation period.

As CUNA develops its comment letter, we would appreciate feedback on the following questions:
  1. Do you believe that the switch from a prescriptive rule to a principle-based rule will provide you more flexibility in making business loans?  Why or Why not?
  2. Will the adjustments in the calculations of loans that count for the MBL statutory cap assist your credit union in making more MBLs?
  3. Does the proposed rule provide you with sufficient clarity to know what will be required in your policies/procedures?  How will the proposed rule affect your current lending practices/policies?
  4. Are you comfortable that your examiner will be able to examine your portfolio and policies utilizing a principle-based rule?
  5. Does the removal of the waiver process benefit your MBL program?
  6. Does the distinction between commercial loans and member business loans benefit your MBL program?
  7. Will your credit union need to create a credit risk rating system or credit grading system in order to comply with the proposed rule?
 
We would welcome your feedback or questions via email.  Further, we encourage you to comment on the proposal using PowerComment.  This is critically important because we’ve noticed the bankers are generating a number of form letters in opposition to the proposal.  While this isn’t a contest where whomever gets the most letters in wins, it is important that well developed comments are submitted to the agency.  
If you have any questions regarding the proposal, please do not hesitate to contact Lance NoggleElizabeth Eurgubian or me.

Pending Regulatory Comment Calls

**Due Today**2015 Annual Regulatory Review List August 3, 2015 NCUA Lance Noggle
**Important**Member Business Lending August 31, 2015 NCUA Andy Price
Minimum Wage and Overtime Pay September 4, 2015 Department of Labor Leah Dempsey
**New** FFIEC Cybersecurity Assessment Tool September 21, 2015 Office of the Comptroller of the Currency Luke Martone
EGRPRA Review September 22, 2015 NCUA Andy Price

Featured Blog:  CUNA, League Staff Engaging State Lawmakers on the CU Dual Charter, TNCs and Much More at NCSL

As the annual Legislative Summit of the National Conference of State Legislatures (NCSL) kicks off today in Seattle, CUNA staff are on the ground protecting credit union interests on an array of topics including the dual chartering policy, transportation network company insurance regulations, payday lending oversight and data security. Shelton Roulhac, Senior Director of Advocacy, and Lynn Coard, Senior Director of Advocacy and Counsel, and I will participate in several meetings and sessions of the Communications, Financial Services and Interstate Commerce Committee as well as the Task Force on State and Local Taxation.

CUNA and staff from several leagues will greet lawmakers at the America’s Credit Unions’ booth in the exhibit hall.  Leagues represented at the booth include the Northwest Credit Union Association, the Kentucky Credit Union League, the Minnesota Credit Union Network, the Georgia Credit Union Affiliates, the Cornerstone Credit Union League, the Tennessee Credit Union League, the Illinois Credit Union League, the Maryland and DC Credit Union Association and the Credit Union Association of New Mexico.  I recently sent a message to state lawmakers encouraging them to stop by the booth to learn about the credit union difference and see what credit union membership looks like in their states.

CUNA along with the American Association of Credit Union Leagues (AACUL), CUNA Mutual Group and Washington credit unions are also raising awareness of credit unions to state legislators and their staff outside of the meetings and exhibit hall. At Seattle-Tacoma International Airport, the baggage claim area displays posters and banners reinforcing the credit union difference and America’s Credit Unions volunteers in green T-shirts are blanketed at the conference.

Last Week on the Removing Barriers Blog
 
CUNA President and CEO Jim Nussle penned an op-ed in The Hill newspaper responding to wild accusations recently made by American Bankers Association President Frank Keating.
As the annual Legislative Summit of the National Conference of State Legislatures (NCSL) kicks off today in Seattle, CUNA and league staff are on the ground protecting credit union interests on an array of topics including the dual chartering policy, transportation network company insurance regulations, payday lending oversight and data security. 
CUNA President CEO Jim Nussle requested The Consumer Financial Protection Bureau (CFPB) to clear up an ambiguity surrounding the definition of “small creditor” as it relates to the bureau’s new mortgage rules. 
Illinois became the 15th state to permit credit unions to conduct prize linked savings raffles.
The Model Credit Union Act was recently updated by a working group comprised of several leagues.
A bill that reorganizes and updates New Hampshire’s Credit Union Act was enacted.
The House Financial Services Committee held the third in a series of mark-ups to consider regulatory relief legislation.  Four credit union-supported removing barriers bills were considered.

 

And Finally…
 
A number of credit unions have contacted CUNA raising concerns about the July 10 order issued by the FCC relative to the Telephone Consumer Protection Act (TCPA).  We blogged about this in the Removing Barriers Blog on July 16, and our friends on the Compliance Team posted additional information on the Comp Blog on July 17.  Since that time, we have had a number of conversations with industry partners, coalition builders and credit unions to discuss possible courses of action, including potential legislative and judicial remedies.  We will have more information on this in the coming weeks. 

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