08/06/2012
Legislative Update
Congressional Briefing Material
Even though Congress isn’t in Washington, many Senators and Representatives will be back in their districts meeting with constituents, holding town hall meetings, and attending community events. We strongly encourage credit unions to take advantage of these opportunities and to schedule in-district meetings during the August recess. We have refreshed the talking points and legislative briefing material on the CUNA Legislative Affairs website. The Congressional Meeting Outline includes condensed talking points for the issues that we hope you will cover in Hike the Hill at Home meetings, including the credit union value proposition, member business lending, ATM fee disclosures and privacy notifications.
Legislative Outlook
When Congress returns in September, there will be only a handful of legislative days before the election, and the outcome of the election will greatly influence the amount of work that can be completed before the new Congress is seated in January. If the conditions come together properly, the lame duck session has the potential to be massive. Considering only the items that Congress needs to get done before the end of the year, it is easy to see how Congress could fill up the seven weeks between the election and the end of the year. Congress will need to resolve how to handle expiring tax cuts, the spending cuts which will automatically go into effect as a result of the sequestration process, the deficit facing the postal service, expiring welfare programs, expiring unemployment benefits, and the debt ceiling, just to name a few. Of course, then there is the matter of funding the government for the next fiscal year, which may be addressed through a six month continuing resolution. With so much left undone, the conventional wisdom is that November and December will be particularly active in Washington. Of course, the outcome of the elections is going to play a very significant role in whether those on Capitol Hill want to tackle these issues at the end of the year, or let the next Congress (and perhaps next President) deal with the problems. We must prepare for a very active lame duck session understanding that no one will know exactly what type of lame duck will unfold until after the election.
Under that backdrop, let's take a look at where some of our priorities stand.
Member Business Lending
Senate Majority Leader Reid has promised a vote on our MBL legislation before the end of the year and we continue to prepare for that vote. Hundreds of meetings have been held by CUNA staff, Leagues and credit unions since GAC and every day, we have more confidence in our ability to win an up-or-down vote on the Credit Union Small Business Jobs Act. We are exploring every opportunity to advance this legislation before the election; we understand the banks have priorities that they would like to see addressed in the short-term as well. The overwhelming message we have received from Senators is that they would like to see a legislative package that includes provisions for credit unions and banks which could benefit small businesses. Combining the Credit Union Small Business Jobs Act and the banks’ extension of the Transaction Account Guarantee Program (TAG) could produce exactly that type of package. We’ve been working closely with key leaders in Congress to ensure that TAG does not move without MBLs.
Regulatory Burden
Reducing regulatory burden is a key priority for CUNA, and in the Legislative Affairs department that means using our resources to urge Congress to encourage – and in some cases, direct – regulators to reduce burden on credit unions. To that end, there are four areas that we are focusing on with respect to Congress and regulatory burden: ATM Fee Disclosures, Privacy Notification, Remittances, and Exemption Authority.
ATM Fee Disclosures: In July, the House of Representatives passed our ATM Fee Disclosure bill (H.R. 4367 / S. 3204) by a vote of 371 – 0. The House vote was the culmination of months of effort that began when a credit union CEO attended a Hike the Hill meeting in Washington and raised this as an issue that Congress should address. But 371-0 votes don’t just happen because someone had a good idea for a bill. This took the work of Leagues, credit unions and CUNA staff to generate the support of the 145 House cosponsors and work to address the concerns of the consumer groups. (For more information our efforts on this legislation, please see my CUNAverse blog post on the subject). Now, the bill is in the Senate where it is being stalled by unrelated matters. The Senate Banking Committee leadership has combined the ATM bill with a piece of legislation designed to protect the privilege of information submitted to the CFPB. This combined legislation (S. 3394) is being held by Senator DeMint (R-SC) for reasons unrelated to either issue. Senator DeMint has had a hold on the stand alone privilege bill (S. 2099) because he wants an up-or-down vote on the repeal of the Dodd-Frank Act. He is unlikely to release his hold on S. 3394 unless he gets that vote; and, he is unlikely to be granted that vote. So, we’re at a standstill right now. To be clear: we support moving the ATM bill as quickly as possible – whether it is combined with the privilege bill or on its own. We have been working with others to resolve the hold situation on the combined bill; but we also believe that the ATM bill could move quickly if it was put forward as a stand-alone measure.
Privacy Notification: Earlier this summer, Representatives Luetkemeyer (R-MO), Sherman (D-CA), and Meeks (D-NY), introduced H.R. 5817, the Eliminate Privacy Notice Confusion Act. This legislation would amend the Gramm-Leach-Bliley Act to require financial institution to send privacy notification to consumers only when their privacy policy has changed. We are working to lay the ground work for this legislation in a manner similar to our efforts on the ATM bill, and we have received positive response from Members and staff with whom we have discussed this issue. We have included talking points regarding this bill in our briefing material. Even though time is short, it is not outside the realm of possibility that we could get this bill through Committee this year if we are able to generate from momentum by adding cosponsors in August.
Remittances: As I mentioned last week, Representatives Blain Luetkemeyer (R-MO) and Yvette Clarke (D-NY) are circulating a Dear Colleague letter encouraging Members of the House to sign-on to a letter encouraging the CFPB to delay and study the impact of its proposed remittances regulation. CUNA has been working with a number of other trades to develop this letter and encourage support for it. If you are contacted by any Representative’s office, we hope you will let them know that we support the Luetkemeyer-Clarke letter. I have attached a copy of the letter to this email for your information. We understand that the following members have added their names to the letter: Campbell, Canseco, Clarke (NY), Guinta, Hastings (FL), Huelskamp, Huizenga, Marchant, Neugebauer, Posey, Schweikert, and Stivers. The deadline for Members to add their name to this letter is this Friday.
Exemption Authority: CUNA has had the opportunity to testify before the 112th Congress 17 times, including 7 appearances this year. Most of these hearings have given us the opportunity to discuss our concerns with the “crisis of creeping complexity” credit unions face with respect to regulatory burden. As the CFPB has started using its rulemaking authority, we have been using these appearances to push for the CFPB to use its authority under Section 1022 of the Dodd-Frank Act to exempt credit unions from its regulations. We have also taken advantage of the opportunity to raise concerns with the proposals to integrate the RESPA/TILA disclosures, the QM and QRM proposals, as well as the remittances rule. We will continue to seek these opportunities to encourage Congress to put pressure on the regulators to reduce regulatory burden on credit unions.
Supplemental Capital
We continue our efforts to educate members of Congress regarding the importance of capital reform for credit unions. The number of members sponsoring our supplemental capital legislation has increased steadily, as this continues to be an issue CUNA staff and Hike the Hill participants raise in their meetings with lawmakers.
Taxation
While we see no immediate threat to the credit union tax status, we are mindful that Congress is likely to engage in comprehensive tax reform next year. While we have always felt prepared for a tax battle, we are taking steps now to be even more sure. We have developed a plan and we are evaluating resources in the event that the tax status comes on direct threat later this year or in the next Congress.
Conclusion
Unless there is movement on any of these or other legislative issues, this will be the last Legislative Update until Congress returns the week of September 10. If you have any questions regarding these or any other issues, I hope you will not hesitate to be in contact with John Magill, Sam Whitfield or me. In the meantime, please schedule visits with your Representatives and Senators during August! Even though the time is short, we still have opportunity to move many of our priorities.