CUNA Advocacy Update October 31, 2016


If you could have seen my email feed around 9 a.m. on Thursday morning, you would have seen a steady stream of emails from CUNA Advocacy staff reviewing the final rule that was about to be considered by the NCUA Board — folks like Elizabeth Eurgubian, Lance Noggle and Andy Price, who have labored for more than a year on making sure NCUA understood what credit unions needed from field of membership modernization. Their message to me was, “we got almost everything we asked for and in some cases its better than we could have hoped for.” It’s true – just take a look at this chart that outlines our major asks in our comment letter, which mirrored a letter we sent prior to the rulemaking. We were so pleased to see so much of that reflected in the final rule.

How did this happen? Well, it happened because we stood together and the CUNA/League system worked interdependently with credit unions from coast to coast. CUNA’s former Federal Credit Union Subcommittee and its successor, the Credit Union Powers Subcommittee, set an early tone in meetings and with letters to NCUA. We worked with our attorneys and experts to make sure our requests were doable under the constraints of the Federal Credit Union Act. We also worked with the state credit union leagues to make sure the grassroots message was loud and clear. This was 360-degree advocacy in action!


Was the final rule precisely as we had suggested? No, of course not. But we all know there is more than one way to make change for a dollar. Instead of four quarters, we might have gotten ten dimes, but the bottom line is that the new field of membership rule gets credit unions to the same place we hoped it would from the beginning. It will help federally-chartered credit unions add new areas to their field of membership, making access to credit unions a bit easier for consumers and small business. It also helps make the federal charter a bit more competitive, which is essential to the viability of the dual-chartered system.


There is still a bit more work to be done. NCUA has proposed additional amendments to the field of membership rule, which we will need to review and comment on. Then, of course, we expect the bankers to initiate a judicial challenge. The CUNA/League system will continue to fight for this rule so consumers can have even more access to credit unions.


NCUA Budget Briefing Provides Opportunity for Feedback on 2017-2018 Budget:

The Board received a Briefing on NCUA’s 2017 – 2018 Budget which included a presentation from NCUA staff. The presentation can be viewed here.

Mike Schenk, CUNA vice president of economics and statistics, and four members of CUNA’s examination and supervision subcommittee including Sean Gaven, senior vice president and chief financial officer of American Airlines FCU; Paul Gentile, president/CEO at the Cooperative Credit Union Association and chairman of the subcommittee; Bill Raker, president/CEO of Firefly CU; and Gordon Sam, chairman of the board of directors of Pearl Hawaii FCU presented testimony on budget and transparency issues.


While CUNA and its Examination and Supervision Subcommittee have long reviewed and commented on the NCUA budget in letters and meetings with the agency, this was the first such briefing conducted by the agency since 2008, and it was held after our relentless advocacy before both NCUA and Congress. For more information on last week’s NCUA Board meeting, please see our Board Meeting Summary.

Marijuana Legalization on the Verge in Several States: 

Marijuana Legalization on the Verge in Several States: With most of the nation’s attention focused on the hotly contested presidential election, voters in Arizona, California, Maine, Massachusetts and Nevada will vote on referendums legalizing the use of recreational marijuana. Recreational marijuana use has already been legalized in Alaska, Colorado, Oregon, Washington and Washington, D.C. and medicinal marijuana has been legalized in 25 states. According to a recent New York Times article, if the initiative is approved in California, pressure for federal legislation facilitating banking these businesses will intensify greatly. Marijuana businesses operating under state laws that have legalized medicinal or recreational marijuana have, for the most part, been denied access to the mainstream financial system because institutions that provide financial services can be prosecuted under federal law. This has led many of these businesses to operate using large amounts of cash, creating safety risks and making taxation difficult. [More]

CUNA Supports FinCEN Proposal for Non-Federally Regulated Institutions:

CUNA filed a letter with FinCEN in support of its proposal that would align certain requirements of “banks lacking a federal functional regulator” with those of federally-regulated banks. The proposed rule would remove the anti-money laundering program exemption for banks that lack a federal functional regulator, which includes roughly 125 privately insured credit unions (PICU).
CUNA supports the proposed rule as issued. We believe it should reduce confusion that has popped up from time to time regarding BSA-related expectations and requirements of PICUs. Further, it is our understanding that most—if not all—PICUs are required by their state financial regulator to comply with BSA requirements that parallel those required of federally insured credit unions by NCUA. [More]

CUNA Opposes CFPB Information Sharing Proposal:

CUNA filed a letter opposing a CFPB proposal that would greatly expand the CFPB’s discretion to release more information to more entities. While information sharing is a critical component to ensuring the safety and soundness of financial institutions, the vast expansion of information sharing contemplated by the proposal could increase the risk of unintended disclosures and a loss of confidentiality, which could ultimately harm consumers[More on CUNA’s letter]
CUNA also signed on to a letter with several other financial trades expressing opposition to the plan on constitutional ground. The joint letter noted that the proposal “raises important First Amendment concerns that we believe the CFPB must address before moving forward. Some federal agencies have attempted to limit entities’ ability to discuss information in the past and multiple courts have rejected such efforts. The CFPB must describe how its process is different from these previous efforts rejected by courts and explain more clearly how this restriction aligns with its mission.” [More on the Joint Letter]

Pending Regulatory Comment Calls: CUNA intends to comment on the following pending regulatory proposals. For our comment letter to have the greatest impact, we need to hear from you. Please consider whether and how these proposals would affect your credit union, and contact the CUNA staff listed with each proposal with your feedback    We encourage Leagues and credit unions to use PowerComment to file comment letters with regulators. For more information regarding these proposals, please follow the links below:

Issue Comment Period Deadline Agency CUNA Staff Contact
Request for Information: Payday Loans November 7, 2016 CFPB Leah Dempsey
Indemnification Payments November 21, 2016 FHFA Andy Price
FHLB Membership for Non-Federally-Insured CUs November 28, 2016 FHFA Andy Price

Posted in Advocacy News, CUNA.