Newsroom

January 27, 2023

5 things to know this week

Govt building 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.

Business investments

The White House and Small Business Administration (SBA) hosted a roundtable earlier this week to discuss the Biden Administration’s efforts to strengthen and streamline small business lending in the wake of the coronavirus pandemic. Part of the discussion centered on the SBA’s recently proposed rules, including those related to Small Business Lending Companies (SBLCs) – which NAFCU has shared concerns about as it could allow unregulated fintechs, prone to fraud, to make SBA-backed loans – and changes to the 7(a) and 504 loan programs.

The administration is also implementing “significant technological improvements” to its Lender Match tool, which connects small business and lenders. The improvements include offering automated tools for lenders to streamline underwriting, making the use of credit alternatives more common place, and offering an automated eligibility module to make SBA lending lower risk and lower cost. These are in effort to enable the SBA to “better fight fraud via increased use of data and automated protocols for SBA-backed loans.”

Merchants keep majority of revenue from credit card sales

Amid ongoing efforts to extend the Durbin Amendment’s interchange routing requirements to credit cards, a new dashboard from the Electronic Payments Coalition (EPC) highlights “merchants keep the vast majority of revenue from credit card sales.” The dashboard explains the components of the merchant discount rate (MDR), which merchants pay to accept credit cards, of which interchange is the largest component. Merchants argue they pass interchange savings onto consumers in the form of lower prices, but NAFCU has flagged the hypocrisy and said placing additional caps on interchange fees will hurt consumers by limiting credit availability and rewards programs.

EPC’s 2022 Q4 Data Dashboard also shows card-not-present (CNP) fraud is on the rise as more consumers use e-commerce and increased usage of Buy Now, Pay Later programs amid the holiday spending season.

Fetterman added to Senate Banking Committee

Senate Majority Leader Chuck Schumer, D-N.Y., released Democrat committee assignments Thursday. Sen. Sherrod Brown, D-Ohio, continues to chair the Senate Banking Committee (SBC) and John Fetterman, Pennsylvania’s new senator, has been added to the committee roster. While Senate Republicans are expected to release their committee assignments soon, Sen. Tim Scott, R-S.C., is set to serve as the SBC’s ranking member.

NAFCU President and CEO Dan Berger has a new op-ed in CUInsight this week highlighting the association’s advocacy efforts to build relationships with lawmakers and secure “the credit union industry’s seat at the table.” Berger notes some of the issues Brown and Scott are likely to take up this Congress, as well as priorities for House Financial Services Committee Chairman Rep. Patrick McHenry, R-N.C.

CU’s diversity self-assessments, ECIP applications due Tuesday

Submissions for the NCUA’s Credit Union Diversity Self-Assessment are due Tuesday. The assessment helps credit unions evaluate their practices against five core standards:

  1. organization commitment to diversity and inclusion;
  2. workforce profile and employment practices;
  3. supplier diversity;
  4. practices to promote transparency; and
  5. approach to self-assessment.

Of note, Episode 2 of NAFCU’s Credit Union Policy Podcast (CUPP) features a discussion between NCUA Chairman Todd Harper and host NAFCU Vice President of Regulatory Affairs Ann Petros on DEI efforts within the credit union industry. The agency also hosts an annual summit on DEI and releases the results of the prior year’s CUDSA submissions.

The NCUA also sent an alert to credit unions this week notifying them that the second round of Emergency Capital Investment Program (ECIP) applications closes Tuesday at 11:59 p.m. Eastern. Between $160 million and $340 million is planned to be made available for investments during this round. The NCUA noted that credit unions participating in the second round of ECIP funding and that meet the eligibility requirements under the agency’s subordinated debt rule may also apply for regulatory capital treatment under the pre-approval requirements outlined in the rule. Subordinated debt applications should be submitted to the appropriate NCUA supervision office by Feb. 28.

Petros receiving VBA award
NAFCU's Ann Petros (left) receiving the Emerson G. Spies Award.

The ECIP allows community financial institutions – including Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) – to provide loans, grants, and other assistance to small and minority-owned businesses and consumers, especially in low-income and underserved communities that were especially hit during the pandemic. The program provided $8.38 billion in investments in 2022.

NAFCU’s Petros honored by Virginia Bar Association

NAFCU Vice President of Regulatory Affairs Ann Petros received the Virginia Bar Association’s Young Lawyers Division’s (VBA YLD) Emerson G. Spies Award, which recognizes enthusiasm, loyalty, and dedication to the association within a given year. Petros’ contributions garnered the VBA national recognition through the American Bar Association’s (ABA) Awards of Achievement and additional awards for programming, going above and beyond the call of duty. Her peers voted her chair-elect of the VBA YLD for 2023 during this year’s annual meeting.