Congress Returns With Full Plate

Having received an earful from constituents back home, members of Congress return to Washington, D.C., with, as usual, a plate full of unfinished business.

From funding the government to cannabis banking and credit union access to military bases, industry lobbyists said they are going to be busy on any number of fronts.

Inevitably, many issues will remain unfinished. But since 2019 is the first year of the 116th Congress, legislation introduced this year can still be considered next year.

Lobbyists said they hope credit union officials used the August recess to connect with members of Congress about issues of importance.

“August is one of the longest periods within the year that members of Congress will be back in their states and districts,” NAFCU Vice President of Legislative Affairs Brad Thaler said shortly after members left town for the August break. “We encourage credit unions to take advantage of this time and meet with their elected officials on critical industry issues.”

And as CUNA Chief Advocacy Officer Ryan Donovan said, when discussing data security, “If we don’t talk about it, the issue dies.”

Here are some of the issues affecting credit unions that might – or might not – be tackled between now and the end of the year.

Government Funding

Funding for large parts of the federal government expires on Sept. 30, the end of the current fiscal year. So Congress must pass individual appropriations bills, legislation that combines several funding measures or a Continuing Resolution to keep the government funded at current levels.

If none of those things occur, large parts of the federal government would again be forced to shut down.

The NCUA and the CFPB are not funded through the appropriations process, so they would stay open even if funding lapses for much of the federal government.

However, credit union officials do care about some programs that are subject to the appropriations process – most notably the Community Development Financial Institutions program.

The Trump Administration has proposed eliminating the program, but Congress has repeatedly rejected that proposal.

In fact, the House has passed funding legislation that would give the program more than $300 million for the next fiscal year. The Senate has not started its appropriations process.

But Congress has expressed strong support for the CDFI program in the past.

“At this point, I don’t have any concerns that won’t be the case” in the next fiscal year, Donovan said.

“Credit unions have been engaged in ongoing efforts to keep Community Development Financial Institution funding at a level higher than [this] fiscal year,” John McKechnie, senior partner at Total Spectrum, said.

Thaler agreed that given the widespread support of the CDFI program, “We’re cautiously optimistic that the funding will be there.”

Banking on Military Bases

The House and Senate has each passed its version of the annual defense authorization, and now conferees must reconcile the differences between the two measures.

The Senate bill would provide banks with the same free rent benefits that credit unions now have on military bases; the House-passed bill would not.

As it might be expected, credit unions are pushing the House proposal.

“Not having any language in the House bill is a positive step,” Donovan said, adding that many state credit union leagues will be in Washington over the next couple of months lobbying on the issue.

“These things take time to develop,” he said.

“We feel we’re in a pretty good position,” Thaler said, adding that there are other huge issues in the bills that must be worked out.

McKechnie agreed that the issue may drag on for a while.

“Most Hill staff believe that conference will stretch into October or later; regardless of the timeframe, credit union activists continue to make their case against this handout to an extraordinarily profitable banking industry,” he said.

Cannabis Banking

CUNA and the American Bankers Association have been pushing House legislation that would provide financial institutions with a safe harbor if they provide services to marijuana-related businesses.

The House Financial Services Committee has approved the legislation, sponsored by Democratic Reps. Earl Perlmutter of Colorado and Denny Heck of Washington.

However, the bill has not gone to the House floor yet.

Senate Republicans, who control the majority in that chamber, traditionally have opposed marijuana legislation.

The Senate Banking Committee held the Senate’s first hearing before the August recess, but Chairman Mike Crapo (D-Id.) has not said whether the panel will consider the legislation.

Donovan said the House could pass the legislation this year, but he is uncertain about Senate action.

Characterizing the marijuana legislation, Donovan said, “It’s a marathon, not a sprint.”

Data Security

Donovan said that as a result of several high-profile data breaches, there may be momentum for Congress to finally enact legislation dealing with the handling of personal data.

He emphasized, however, that the issue of data privacy must be coupled with security.

“You can’t have data privacy without data security,” he said.

For several years, the data security issue has centered on a fight between financial institutions and retailers. Banks and credit unions have argued that merchants should be subject to the same data security standards that they must comply with.

Merchants have opposed such a plan.

“There have been a lot of discussions,” Donovan said, adding that he does not yet see a path that could result in legislation quickly.

“Congress has unfortunately left upgrades to the data security process by the wayside, and it’s time for the law to be changed to get merchants into the serious business of consumer protection in this area,” McKechnie said. “I hope credit unions persist in delivering this message.”

Miscellaneous Issues

Congress is struggling with other issues that credit union officials are watching.

For instance, bipartisan groups in both houses have been working on legislation updating the Bank Secrecy Act and Anti-Money Laundering laws.

“Bank Secrecy Act modernization should be a priority,” McKechnie said, adding that Congress could increase the thresholds for reporting suspicious activities.

Thaler and Donovan agreed that the legislation should be a priority, but Thaler added there still are issues that must be reconciled.

Thaler also said there could be an effort to resolve House and Senate differences in legislation governing robo-calls.

“There will be an effort to reconcile those,” he said, adding that there could be an incentive to enact such a bill. “Nobody likes robocalls.”