Two CU Issues Rising to the Top in D.C.

The Supreme Court has announced it will listen to arguments later this year concerning a lawsuit challenging the funding of the CFPB. Last October, the 5th U.S. Circuit Court of Appeals ruled the CFPB’s funding mechanism was unconstitutional – a ruling praised by credit union trade organizations.

The ruling was considered a victory for lenders and many financial institutions that have been against the CFPB’s regulatory authority since its inception in 2010, believing that the structure was unconstitutional.

The panel of judges found placing the CFPB’s funding outside of the congressional appropriations process violates the constitutional structure of separation of powers.

After Monday’s announcement by the Supreme Court, CUNA President/CEO Jim Nussle said, “It’s been clear for some time that there are serious flaws with the CFPB’s current structure and we have long supported congressional action to restore accountability and oversight. The Supreme Court agreeing to hear the case on constitutionality highlights the urgency of this issue.”

NAFCU and CUNA have long advocated that the NCUA should be the sole regulator of credit unions.

The Supreme Court has not set a date for oral arguments in the case, but it’s expected to happen sometime this fall and a ruling would be issued in early 2024.

Business Lending Bill Introduced

Sens. Mazie Hirono (D-Hawaii) and Dan Sullivan (R-Alaska) introduced a bill Tuesday to exempt the member business lending cap of credit union loans made to businesses owned by veterans.

Currently, credit unions are limited to 12.25% of their total assets when it comes to business lending. This bill would amend the Federal Credit Union Act to exclude extensions of credit made to veteran-owned businesses from the member business lending definition.

Once the bill was introduced, Nussle said, “This bipartisan bill would allow credit unions to get additional capital out to meet the needs of veteran business owners. Credit unions have a long history of service to servicemembers, and we thank Sens. Hirono and Sullivan for their bipartisan leadership to help credit unions do even more.”

In a statement released from CUNA, other credit union executives also reacted to the legislation.

“Alaska is known for being the highest veteran population per capita of all 50 states. These veterans need access to affordable business loans through a robust competitive environment,” Alaska Credit Union League President Dan McCue said. “Veteran-owned businesses in every state should be provided equal access to business loans offered by credit unions like those offered by other financial institutions. We thank Senator Sullivan for cosponsoring this bipartisan legislation to ensure credit unions can serve the needs of veteran business owners.”

“Mahalo to Senator Mazie Hirono for her continued support of this bill giving Hawaii’s credit unions greater business lending authority to help veteran entrepreneurs,” Hawaii Credit Union League President Carol Marx said. “Bipartisan legislation demonstrates collaboration with Senator Dan Sullivan to improve the financial well-being for many in Hawaii and across the nation.”