Below, you’ll find the latest information on“hot” legislative topics impacting Tech CU and the credit union industry as a whole.
The push by big banks (ABA) to tax credit unions is gaining strength. Though Congress’ recent focus has been on larger budget concerns, make no mistake that the fight between bankers and credit unions over taxation remains as strong as ever.
What’s the current status?
Why should I care?
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The Credit Union Small Business Jobs Creation Act (H.R. 688) proposes to raise the cap on credit union member business loans from 12.25% to 27.5%.
In a recent survey conducted by CUNA, nearly 30% of credit unions reported dissatisfaction with their most recent exam. Congress is considering legislation to bring fairness to the examination process: The Financial Institutions Examination Fairness and Reform Act (H.R. 1553).
The Eliminate Privacy Notice Confusion Act (S. 635 / H.R. 749) would provide benefits to both credit unions and their members by streamlining the compliance burden of credit union privacy policies.
The federal government has a very important role in ensuring that the secondary market operates efficiently, effectively and fairly for all borrowers and lenders alike. Credit unions maintain a level of concern about the possibility of the secondary mortgage market being controlled by a handful of very large banks. Credit unions create much needed competition in the secondary marketplace — helping to keep rates low and allowing for more options.
As Congress considers comprehensive housing finance reform, credit unions must continue to have access to the secondary mortgage market.
Currently, credit unions have restrictions on sources of capital — the only thing that counts as capital for a credit union is retained earnings. Allowing credit unions to access supplemental forms of capital would be a safety and soundness tool — acting as a buffer to absorb operating losses and asset write-downs during economic downturns.
The Capital Access for Small Businesses and Jobs Act (H.R. 719) would modify the definition of credit union net worth — including supplemental forms of capital for credit unions and allowing regulators to develop risk-based capital standards for prompt corrective action (PCA)
The Merchant Payment Coalition continues its effort through litigation to try and reduce the fees merchants pay in order to accept payment cards. Financial service trade associations (including CUNA) continue to fight against the coalition, arguing that the rate is too low.
Merchants are not passing savings from lower fees onto consumers. In addition, lower fees do not take into account the significant costs financial institutions incur to protect merchants against theft and fraudulent transactions.
Federal Reserve Regulation D limits consumers to six transfers per month from their savings account to any other account. This regulation requires credit unions to devote valuable time and resources to monitoring members’ accounts.
The Regulation D Study Act (H.R. 3240) instructs the U.S. Government Accountability Office to study the impact of the Federal Reserve Board’s monetary reserve requirements (implemented through Regulation D), on depository institutions, consumers and monetary policy.
For detailed information on any of these legislative issues, visit the Credit Union National Association (CUNA) Legislative Hot Topics page.
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