Newsroom

NAFCU's widely read NAFCU Today is credit union leaders' go-to source for the latest on issues impacting the credit union industry. For those short on time, here's a roundup of this week's top need-to-know updates and resources.

Gov’t shutdown looms as interchange battle heats up

The odds of a government shutdown are increasing, as current funding is set to expire Sept. 30 and both the House and Senate have failed to advance any legislation to extend funding.

In the Senate, several lawmakers have filed amendments to the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act, which has been proposed as a “minibus.” Among those holding up a vote on the package are Sens. Roger Marshall, R-Kansas, and Dick Durbin, D-Ill., who want their big box bailout attached to the bill. NAFCU continues to urge senators to oppose their effort, as well as one by Sen. Josh Hawley, R-Mo., to cap credit cards’ annual percentage rate at 18 percent.

Several groups spanning key industries outside of financial services are also opposed to Marshall and Durbin’s big box bailout:

• A group of labor unions representing airline industry workers also sent an alert yesterday highlighting Labor’s opposition to the bill and noting that “since 2010, mega-retailers like Amazon and Walmart have pocketed more than $106B that was supposed to be returned to consumers” and flagging the negative impact on airline rewards and points, which will hurt union workers.
• Airlines for America, a trade association representing the nation’s largest airlines, has launched a campaign against the bill.
• A recent report from the Progressive Policy Institute (PPI) called for lawmakers to reject this latest effort, and highlights that “there is considerable evidence that extending the Durbin Amendment to credit cards would not only fail to provide consumers with any savings, it could actually leave them worse off.”
• NAFCU joined with several other associations representing virtually all banks and credit unions, including those primarily serving military-affiliated customers and members, to send a letter last week opposing the amendment and detailing the consequences of the interchange legislation on consumers and financial services.

Credit unions are urged to keep up the fight by contacting legislators via NAFCU’s Grassroots Action Center.

In the House, Speaker Kevin McCarthy, R-Calif., is working to roundup support on a short-term continuing resolution that appeases some conservative lawmakers’ concerns. The bill proposes steeper cuts to government funding, additional provisions related to border security, and a new topline number for House appropriations bills – $64 billion less than what was agreed to in the debt ceiling deal earlier this year. It’s unclear if the House has enough votes to pass the measure, which would likely fail in the Senate.

NAFCU will monitor funding discussions to warn of consequences during any lapse in federal funding, and advocate for credit union priorities.

NDAA moves toward conference committee

Earlier this year, the House and Senate passed versions of the fiscal year 2024 National Defense Authorization Act (NDAA) – neither of which included NAFCU opposed provisions related to interchange or military base leases. As the chambers will soon convene a conference committee to hash out differences between the two bills, House leaders this week named members to serve on the committee. See the lists of House Republican and Democrat conferees.

NAFCU will work with lawmakers throughout the process and urge Congress to pass a bill free of provisions that would have a negative impact on the credit union industry.

Anti-CBDC bill advances out of committee

The House Financial Services Committee held a markup Wednesday, during which it advanced legislation to prohibit the creation of a central bank digital currency (CBDC) without congressional approval. The bill would also prohibit the Federal Reserve from issuing digital currencies directly to consumers, and from using a CBDC in monetary policy.

Ahead of the markup, NAFCU reiterated its opposition to the creation of a CBDC, arguing that credit unions represent a superior and safer alternative for advancing financial inclusion goals and promoting affordable access to payments.

FedNow town hall available on-demand

The FedNow Service hosted a town hall last month, during which it announced that “in just one month since launching the FedNow Service, we’ve gone from 35 live financial institutions and 16 service providers to 65 participating financial institutions and 20 service providers ready to support payment activity, and these numbers are growing weekly.” Additionally, 200 more organizations have signed agreements with the Fed to begin onboarding onto the service.

A recap of the town hall is available online, as well as an on-demand recording and presentation slides.

During NAFCU’s Congressional Caucus earlier this month, NAFCU held a panel discussion on FedNow with key stakeholders who shared their perspective on the instant payments platform. NAFCU has long supported the Fed’s involvement as an operator of a new, real-time payments rail. The association has webinars available on-demand, and will continue to advocate for development of robust risk management tools, safeguards, and end-user features to promote FedNow adoption. The Fed has several resources available for financial institutions and service providers on the FedNow Service.

CFPB announces TILA threshold adjustments

The CFPB released its annual threshold adjustments for certain regulations falling under the Truth in Lending Act’s (TILA) Regulation Z, which implements the Credit Card Accountability Responsibility and Disclosure Act (CARD Act), the Home Ownership and Equity Protection Act (HOEPA), and the ability-to-repay/qualified mortgage (QM) provisions of the Truth in Lending Act. All adjustments will be effective Jan. 1, 2024.

Specifically, for open-end consumer credit plans under TILA, the threshold that triggers requirements to disclose minimum interest charges will remain unchanged at $1 in 2024. For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages in 2024 will be $26,092. The adjusted points-and-fees dollar trigger for high-cost mortgages in 2024 will be $1,305. Additional details for the threshold spread between the annual percentage rate (APR) and the average prime offer rate (APOR) for QMs can be found in the final rule.