CUNA Advocacy Update – Week of May 8, 2017

Alternative Capital Comment Period Ends Today: Earlier this year, NCUA issued an Advance Notice of Proposed Rulemaking (ANPR) to solicit comments on alternative forms of capital that federally insured credit unions can use in meeting capital standards required by statute and regulation. The ANPR includes secondary capital and supplemental capital. Secondary capital is permissible for low-income designated credit unions and can be counted toward both the net worth ratio and the risk-based net worth requirement under NCUA’s prompt corrective action standards. The Board is contemplating authorizing supplemental capital instruments that would only count towards the risk-based net worth requirement.

CUNA supports the authority of credit unions to build additional capital, either from members or nonmembers, in a way that does not dilute the cooperative ownership and governance structure of credit unions. This additional capital should be subordinated to credit unions’ share insurance funds so credit unions have the financial base to offer member services and adjust to fluctuating economic conditions.

CUNA will file its comment letter tomorrow. In our letter, we will urge NCUA to use the alternative capital rule for risk-based capital to create an environment for limited experimentation by credit unions in the creation of supplemental capital instruments – limited in amount to not expose the share insurance fund to undue risk, but flexible to allow the development of the most appropriate instruments that will be useful and cost effective for credit unions. We recommend the rule not limit permissible supplemental capital instruments to one or two restrictively defined instruments. Rather, the rule should contain requirements that any capital instrument would have to comply with, without specifying precisely how. Any issuance should be subject to regulatory approval prior to issuance, like the initial approach taken by the NCUA for derivatives. [Read more and take action]

Scheduling note: The House of Representatives is in recess this week. The Senate is in session. Check out our outlook for the week here.

CFPB to Hold Field Hearing on Small Business Lending: The Consumer Financial Protection Bureau will hold a field hearing on small business lending on Wednesday at 2pm EDT / 11am PDT. This hearing is expected to focus on provisions in the Dodd-Frank Act that require the CFPB to collect information on small business loans made to women- and minority-owned businesses. Sharon Lindeman, vice president for regulatory advocacy at the California and Nevada Credit Unions Leagues, will testify.

CHOICE Act Passes Committee with Credit Union Priorities: After two and a half days of mark-up, CHOICE 2.0 passed the House Financial Services Committee by a vote of 34-26. While the votes and the amendments stuck to party lines, CUNA was encouraged to hear a number of Members from both parties cite the negative effects overly broad rules stemming from the CFPB have had on credit unions and their members. [Read more]

CUNA Supports CLEARR Act: Last week, CUNA sent a letter to Representative Blaine Luetkemeyer (R-MO) thanking him for introducing H.R. 2133, the “Community Lending Enhancement and Regulatory Relief Act of 2017” also known as the “CLEARR Act.” [Read more]

Pending Regulatory Comment Calls: CUNA plans to comment on the following pending regulatory proposals. For our comment letters 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 for each proposal with your feedback.

For more information regarding these proposals, please follow the links below:

Issue Comment Period Deadline Agency CUNA Staff Contact
Alternative Capital May 9, 2017 NCUA Andy Price
Use of Alternative Data and Modeling Techniques in the Credit Process May 10, 2017 CFPB Leah Dempsey
Remittance Rule Assessment May 23, 2017 CFPB Luke Martone
Technical and Clarifying Amendments to HMDA Oct. 2015 Final Rule May 25, 2017 CFPB Andy Price
Credit Card Market Request for Information June 8, 2017 CFPB Lance Noggle
CUNA Indicates Support for Flood Insurance Reauthorization: Last week, the Senate Committee on Banking, Housing, and Urban Affairs had its second hearing to discuss the Reauthorization of the National Flood Insurance Program (NFIP)—which is set to expire at the end of September. Prior to the hearing, CUNA sent a letter supporting the Committee’s efforts to reauthorize the Program later this year. [Read more]

Michigan Credit Unions Encourage NCUA to Merge Funds: The Michigan Credit Union League and 100 Michigan credit union CEOs sent a letter to the NCUA’s Acting Chairman Mark McWatters and Board Member Rick Metsger encouraging the NCUA Board to merge the National Credit Union Share Insurance Fund (NCUSIF) and the Temporary Corporate Credit Union Stabilization Fund (TCCUSF). They also urged the Board to issue a dividend to any credit union with amounts over the mandated 1.3% in the NCUSIF. [Read more]

Over on the Removing Barriers Blog:

Interesting Reads:

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