June 16, 2023

5 things to know this week

ColumnsNAFCU'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.

Senator unveils CRA in disapproval of CFPB small biz data collection rule

Sen. John Kennedy, R-La., introduced a Congressional Review Act (CRA) resolution of disapproval regarding the CFPB’s rule to implement section 1071 of the Dodd-Frank Act, which amends the Equal Credit Opportunity Act (ECOA).

NAFCU Vice President of Legislative Affairs Brad Thaler offered support for the resolution, stating the rulemaking would put significant costs on credit unions which would “result in less availability of credit for small businesses.”

NAFCU strongly advocated against the CFPB’s section 1071 rulemaking as its requirements would likely stifle credit unions’ small business lending. A CRA resolution was also introduced in the House in an attempt to overturn the rule. NAFCU will continue to engage the bureau and lawmakers on the issue to obtain regulatory relief for credit unions.

2024 spending bill markups to begin next week in the Senate

The Senate will begin marking up fiscal spending bills for 2024 next week, with a plan to tackle the funding totals set in stone by the recent debt ceiling deal. Concerns about a potential government shutdown have already begun swirling as the House Appropriations Committee plans to push for drastic spending cuts despite the debt ceiling agreement.

Politico reported House Republicans have committed in writing to cutting $115 billion in previously enacted funding for the IRS, the Environmental Protection Agency, the General Services Administration, the Department of Agriculture, and other agencies. Senate appropriators have acknowledged that major differences between the House and Senate were inevitable. “At the end, we’ll have to work it out,” Senate Minority Leader Mitch McConnell, R-Ky., said.

NAFCU will continue to closely monitor the negotiations and keep members informed of any changes. The association consistently warns lawmakers against inaction on issues that must be addressed to ensure certainty for consumers and credit unions and the continuity in federal programs. The association will continue to engage with lawmakers and regulators on credit union priorities.

Senate confirms Biden’s chief economist

Senate Democrats Tuesday confirmed President Joe Biden’s pick to chair the Council of Economic Advisors (CEA), Jared Bernstein. Despite opposition from Sen. Joe Manchin, D-W.Va., and Republicans, Bernstein was approved by a 50-49 vote. Bernstein’s nomination was part of a February announcement of changes to Biden’s economic policy team, which included then-Federal Reserve Vice Chair Lael Brainard stepping down to lead the President’s National Economic Council.

Bill would reduce failed banks’ executive compensation

Senate Banking Committee Chair Sherrod Brown, D-Ohio, and Ranking Member Tim Scott, R-S.C., have indicated they have an agreement on a bill to provide increased accountability for executives at failed banks. The legislation would propose rolling back executive compensation, implementing industry bans, and various other penalties.

The committee plans to hold a markup on the bill Wednesday.

House committees tackle digital assets, small biz assistance

The House Small Business Committee Tuesday held a hearing to examine private and public resources available to help small businesses. Ranking Member Nydia Velazquez, D-N.Y., spoke about the wide range of Small Business Administration programs that assist small businesses, while also noting a concerning lack of access to capital and mentorship programs for small businesses in underserved areas.

NAFCU’s Thaler wrote to the committee ahead of the hearing, reinforcing the association’s support for the Member Business Loan Expansion Act, which would make it easier for credit unions to offer smaller business loans under $100,000 by ensuring they do not count toward the arbitrary credit union member business lending (MBL) cap. The association will continue to advocate for a healthy regulatory environment that neither stifles innovation nor discourages credit unions from providing consumers and small businesses with access to credit.

Also Tuesday, the House Financial Services Committee discussed digital assets, with lawmakers vocalizing the need for bipartisan action to preserve American innovation. The committee also touched on the viability of stablecoins and where legislation on this topic currently stands. NAFCU will continue to advocate for a clear regulatory framework for cryptocurrency and other financial technologies to support innovation and adoption while reducing risks.