Advocating for Financial Well-being for All
CUNA shares four key elements of its advocacy agenda as CU leaders prepare to meet with lawmakers during GAC.
As thousands of credit union leaders come to Washington, D.C. to talk face-to-face with lawmakers on Capitol Hill during the CUNA Governmental Affairs Conference, there’s no time to waste in focusing the attention of Congress on the key things we want to accomplish for 130 million credit union members.
Our commitment to financial well-being for all is at the core of credit unions. And that’s where we start in driving our 2023 advocacy agenda forward.
Preserve the Credit Union Tax Status
Credit unions prove every day that the credit union tax status is one of the most significant investments the government makes in people, nearly 100 years after Congress passed the Federal Credit Union Act. The $2 billion Congress invests in the credit union tax exemption generates more than $208 billion in economic impact every year. We save members $13.5 billion and pay $29 billion in local, state and federal taxes each year.
The pandemic demonstrated, once again, that when other financial institutions won’t help, credit unions will. Credit unions worked around the clock to help people survive job loss and economic uncertainty by providing loan modifications, waiving fees and being a financial resource when people needed it most. We helped small businesses up and down Main Street, providing the capital to keep doors open and people employed.
Credit unions’ structure and focus on people helping people remains hard at work across our country. Making sure credit unions remain a viable choice for consumers to find the financial services they want and need is where our advocacy focus starts and stops.
Protect and Empower Credit Unions
One of the most pressing concerns in our efforts to protect and empower credit unions is maintaining current interchange rules. In the last Congress, the so-called Credit Card Competition Act – spearheaded by Senators Durbin and Marshall – would be disastrous for the payments system. It would give retailers the power to decide which credit card network to use without any data security requirement, opening the door for retailers to use the cheapest, less-secure option. The result would be higher-risk transactions for all American consumers, while retailers have no responsibility to protect or pass on cost savings.
CUNA, Leagues and credit union leaders worked together in the past year to address concerns with this bill, successfully keeping it out of several year-end pieces of legislation. We are fully prepared to continue our strong, vocal opposition in this Congress. Engagement with members in both chambers, including the valuable work of credit union leaders on Capitol Hill during the CUNA GAC, helps lawmakers fully understand the potential massive harm to consumers, small businesses and financial institutions.
Along these same lines, there’s a significant need for Congress to address comprehensive data security protections and privacy standards. More than 300 million people were affected by data breaches in 2020 and that number isn’t slowing down. People rely on cards to pay for groceries, emergency car repairs and everything in between. When those cards aren’t protected by every single entity that has access, consumers lose. We support legislation to establish robust federal security requirements across the country, akin to those required of financial institutions under the Gramm-Leach-Bliley Act (GLBA), for all who collect or hold personal data.
Credit unions are also focused on changes in the digital assets marketplace, which demands a comprehensive regulatory framework with consistent oversight for similar products and services. A coordinated approach among prudential regulators would provide clarity and a level playing field that encourages competition, provides robust consumer protections and promotes responsible innovation. Credit unions should be included as players in this space, and in any legislation addressing digital assets.
We also continue our efforts to provide clarity and a safe harbor for financial institutions to serve cannabis-related businesses in states where it is legal and urge Congress to pass legislation to specifically address this issue as more and more states vote to legalize marijuana for medical purposes, recreational purposes or both.
Modernize Credit Union Opportunities
CUNA hit the ground running in our legislative agenda with the House introduction and passage of the Credit Union Board Modernization Act this year. We are focused on passing this in the U.S. Senate and into law, enhancing credit union board meeting flexibility.
Credit unions continually look for ways to give consumers access to more choices in financial services – whether it be addressing financial deserts, serving underserved communities, and supporting programs that help consumers and small businesses. We want to address member business lending so the arbitrary 12.25% limit doesn’t prevent hard-working people – specifically veterans – from getting the loans they need to start and grow small businesses in our communities. We also look to increase loan maturity limits for federal credit unions, so non-mortgage loan terms can extend longer than 15 years and provide more options for student, agricultural and business loans.
Right-size Regulatory Impact
Credit unions support policymaking with a focus on data and driven by need, not politics. Regulatory changes should focus on commonsense efforts and fully consider the impact on all consumers. One-size-fits all regulatory actions ignore credit unions’ unique structure, requirements and the needs of our members.
One of the biggest challenges on the regulatory front is the shifting nature of the CFPB. Having a single director requires credit unions to change direction with each new administrator. Credit unions support a bipartisan commission leadership structure at the CFPB, bringing stability to the entire system and allowing credit unions to focus on members’ financial well-being.
When the CFPB lumps the cost of a needed service together with others as a “junk fee” without considering the costs involved in providing needed financial services that consumers depend on, consumers lose. Access to overdraft protection must be protected as a helpful safety net. Low- and moderate-income households depend on these services to resolve short-term financial difficulties. Consumers must opt-in to having the option of overdraft protection and the cost to use it. The people who choose to use the service are the people who pay for the service.
Credit unions believe in empowering consumers to manage their finances. This includes the choice to access a variety of services if they need them. Consumers use overdraft protection as a safety net to help protect them from life’s challenges. Credit unions constantly adapt overdraft programs to better address the financial well-being of their members. We work with our members to help them address those financial challenges and avoid fees. Without the option of overdraft protection, people are more likely to turn to predatory lenders, hurting the same people that regulatory agencies like the CFPB are charged to help.
We also continue our efforts to expand NCUA Central Liquidity Facility access to allow corporate credit unions to obtain liquidity on behalf of small credit unions.
As you can see, there’s a lot to talk about – and this isn’t every issue at hand. We call on every credit union leader to engage and get involved, and make your voices heard on the issues that affect your members. Advocating for them is yet another way for your credit union to serve their needs and lets lawmakers know that credit unions back home are paying close attention.
Jim Nussle President/CEO CUNA Washington, D.C.