2017 Legislative & Regulatory Priorities

After a successful 2016 marked by successes for NAFCU and its members, we are looking forward to an exciting new year of change and opportunity for the credit union industry.

As NAFCU celebrates its 50th year as a credit union advocate, and as a new administration and the 115th Congress begin, NAFCU staff will be working hard in Washington to press for effective regulatory relief for credit unions. Following are NAFCU's legislative and regulatory priorities for 2017. (Download the priorities in a special edition PDF of NAFCU UPDATE.)

Preserve the credit union tax exemption

Preserving credit unions' federal corporate income tax exemption remains our number one legislative priority. No member of Congress has proposed eliminating the exemption; under a new Republican administration and Republican controlled Congress, however, the issue could get a fresh look from new sets of eyes. NAFCU will remain vigilant. Read more

Push for regulatory relief, CFPB exemption

NAFCU continues to push Congress and the federal regulatory agencies to do more to relieve credit unions from regulations aimed at preventing the abusive practices that helped spur the financial crisis – and in which the credit union industry did not engage. We will continue to urge the CFPB to make better, more effective decisions in how it exercises its authority, including exempting credit unions from its regulations under Section 1022 of the Dodd-Frank Act.

NAFCU will maintain its strong advocacy efforts for credit union regulatory relief in 2017 both in Congress and at the regulatory agencies. Read more

Repeal the Durbin amendment

Last year saw legislation introduced in the House and passed out of committee to repeal the Dodd-Frank Act's Durbin amendment. In 2017, NAFCU will continue to push for repeal of the failed Durbin measure and to fight against any efforts to expand interchange price caps to credit cards. NAFCU will also continue to advocate on behalf of our member credit unions for a reasonable return from interchange fee income. Read more

Protect CUs' interests in housing finance reform

Effective housing finance reform that preserves a government guarantee, maintains unfettered access to the secondary market and ensures fair pricing for credit unions based on loan quality, not volume, will remain a top legislative issue for NAFCU for 2017 as lawmakers continue deliberations on the disposition of the government-sponsored enterprises, including Fannie Mae and Freddie Mac.

NAFCU is also monitoring progress on the Federal Housing Finance Agency's proposal on membership requirements for the Federal Home Loan Banks. We will continue to work with the FHFA to ensure the agency's activities do not hinder credit unions' ability to sell mortgages on the secondary market. Read more

Promote national data security standards for merchants

NAFCU will ramp up efforts to win final passage in Congress of national data security standards for merchants like the ones credit unions and banks follow under the 1999 Gramm-Leach-Bliley Act. The association will continue this work while seeking to increase credit union awareness of cyber threats. NAFCU is also continuing to monitor the NCUA's supervisory priorities related to cybersecurity and seeking to ensure credit unions are not held to overly burdensome cybersecurity standards. Read more

Advance and defend field-of-membership reform

Strengthening the ability for credit unions to serve more consumers and pursuing regulatory relief for credit unions is at the core of NAFCU's advocacy efforts. Moreover, NAFCU believes the industry's dual chartering system works best when state and federal charters keep up with one another – and several states are moving rapidly on modernization to keep pace with the marketplace. While 2016 marked NCUA's most comprehensive reform of its field-of-membership (FOM) rules in 10 years, including several NAFCU-backed provisions, we will continue to look for ways that NCUA can provide more FOM relief.

Additionally, with bankers now challenging NCUA in the courts over its new, modernized FOM rules, NAFCU will work to ensure the rules are implemented swiftly, defend credit unions' interests and support the legality of the agency's rules. Read more

Pursue a true, risk-based capital system

NAFCU will continue to push for a fair capital system for all federally-insured credit unions that both provides for true risk-based capital and access to supplemental capital. NAFCU consistently opposed and urged the withdrawal of NCUA's risk-based capital rulemaking, which takes effect Jan. 1, 2019, but has also worked steadfastly to improve the rule for credit unions.

NAFCU believes legislative reforms will be required to achieve a true and fair risk-based capital system for credit unions. To that end, we have outlined a legislative solution that would institute changes to credit union regulatory capital requirements. This plan directs NCUA, with industry representatives, to conduct a study on prompt corrective action and recommend changes; modernize capital standards to allow supplemental capital; design a risk-based capital regime for credit unions that takes into account material risks; and establish special capital requirements for newly chartered federal credit unions. Read more

Ease arbitrary restrictions on member business lending

NAFCU has long advocated for member business lending reform, both through legislation and through regulatory relief from NCUA. The NCUA's revised MBL rule, backed by NAFCU and effective January 2017, removed many of the prescriptive underwriting and personal guarantee requirements, thereby eliminating the overly burdensome waiver process. NAFCU will continue to vocally support the NCUA and the legality of its MBL rule in the face of ICBA's suit against the rule. In the coming year, NAFCU will also continue to work with Congress to advance legislation to provide relief from the statutory, arbitrary MBL cap. NAFCU will also continue to work with Congress to advance legislation to provide relief from the statutory, arbitrary MBL cap. Read more

Additional advocacy work in 2017

The above legislative and regulatory aims top NAFCU's list of priorities for 2017, but the association will be advancing a number of other credit union industry concerns as well, among them:

Fight an unnecessary premium charge, urge swift refunds from the TCCUSF and budget transparency from NCUA

NAFCU will continue efforts to keep NCUA transparent and accountable for how it spends credit union dollars. Using all available channels, we will fight any effort by the agency to charge a federal share insurance premium in 2017. Read more

Obtain clarity on Military Lending Act requirements

The Department of Defense amended its Military Lending Act regulation in 2016. Because of the complicated nature of the rule, NAFCU will continue to urge DoD to release additional MLA compliance guidance, clarify and amend the text of the final rule, and push back the credit card compliance deadline one year beyond the current deadline of Oct. 3, 2017. Read more about MLA compliance

Prevent unnecessary rules on overdraft and payday lending

The CFPB has listed overdraft on its rulemaking agenda and has indicated to NAFCU that it plans to issue an overdraft outline of proposals under consideration in early 2017. While the future of any CFPB rule is uncertain with the change in administration, NAFCU will remain vigilant in protecting credit unions' ability to provide overdraft services and small-dollar loans to their members.

Ensure clarity, minimize burdens for credit unions during CECL implementation

Last June, the Financial Accounting Standards Board issued its long-expected final "current expected credit loss" accounting standard update. The final standard included a number of changes NAFCU advocated for, including measures to make the standard scalable and an extended implementation period for credit unions. NAFCU will continue to work with the NCUA to minimize the burden of implementation.