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Thursday was a packed day for lawmakers in the House and Senate who took up two pieces of legislation that, inside, held issues of particular importance to credit unions: The 2024 National Defense Authorization Act (NDAA) and the Congressional Review Act.
Via the Congressional Review Act, members of the House Financial Services Committee passed a resolution Thursday night to void the CFPB section 1071 rule – a rule NAFCU and CUNA officials have opposed.
Section 1071 of the Dodd-Frank Act mandates credit unions and other financial institutions collect and report specific data concerning applications for credit. Credit union trade groups have said the rule would be incredibly burdensome, especially for smaller credit unions, and potentially raise "the cost of small business borrowing."
Reacting to the committee's vote, CUNA Deputy Chief Advocacy Officer for Federal Government Affairs Jason Stverak said, "We thank the committee for acting against this rule that has noble intent but would lead to harm and reduced access to credit for small businesses. Community financial institutions and the businesses they depend on can't afford the substantial increase in cost in borrowing this rule would create."
NDAA Passes Senate
Also on Thursday, the Senate passed its version of the 2024 NDAA by a vote of 86-11. Lawmakers did not include interchange or military base lease provisions in the final bill, two items credit union trade groups had been pushing against for weeks.
In the Senate version of the NDAA, there was an attempt to add the Credit Card Competition Act (CCCA) of 2023 legislation to the final bill. That attempt failed after groups such as CUNA, NAFCU, the Defense Credit Union Council and seven other banking organizations lobbied hard in opposition to the CCCA, calling it impractical, technically-flawed and unnecessary.
In a letter to Senate leaders earlier in July, the groups argued adding the CCCA to the NDAA will do much more harm than good as it relates to helping military members and their families.
"The CCCA will not increase competition in the credit card marketplace, but it will benefit multi- national retailers at the expense of consumers and community financial institutions, including those serving members of the military," the letter stated. "It does so by reducing the number of credit card issuers competing for consumers' business, removing a consumer's choice of preferred card network, reducing the competitive differences among card products, limiting popular credit card rewards programs, and putting the nation's private-sector payments system under the micromanagement of the Federal Reserve Board. It will also make it more difficult for merchants and federally-insured financial institutions to prevent fraud and protect the transaction data."
The 2024 NDAA now heads to the House, where political leaders have said it could be very difficult to pass the Senate version.
Both the House and Senate are scheduled to be on summer recess for the month of August.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
