December 30, 2022

A look back at top issues of 2022

US Capitol buildingNAFCU's widely read NAFCU Today is credit union leaders' go-to source for the latest on issues impacting the credit union industry. Here’s a look back at the top news stories of 2022 and how NAFCU’s advocacy team fights for credit unions in Washington.

Efforts to extend the “Durbin Amendment” to credit cards

After Sens. Dick Durbin, D-Ill., and Roger Marshall, R-Kansas, introduced legislation in July – the Credit Card Competition Act (CCCA) of 2022 – that would have extended debit interchange routing requirements to credit cards, NAFCU President and CEO Dan Berger hit back in a letter to the Senate outlining the negative impacts of imposing any new caps or restrictions on interchange fees.

“The Credit Card Competition Act of 2022 is not about competition,” wrote Berger. “It is about increasing the profits of big box retailers at the expense of consumers and financial institutions by creating government intervention in a free market and establishing a back-door price control on the credit card system.”

NAFCU’s ardent advocacy against this legislation successfully kept the CCCA out of the 2023 National Defense Authorization Act and the $1.7 trillion omnibus spending package. The association will continue to educate lawmakers on the consequences of interchange caps on consumers and fight against any future efforts to advance similar bills.

Relatedly, the Federal Reserve in October issued a final rule on Regulation II – which covers debit card interchange fees and network routing exclusivity – requiring all debit card issuers to enable and allow merchants to choose from at least two unaffiliated networks for card-not-present (CNP) transactions, such as online purchases. NAFCU had urged the Fed to withdraw the modification, sharing how it would negatively impact credit unions and their members.

CFPB guidance on “illegal junk fees”

In October, the CFPB released guidance regarding “illegal junk fees” on deposit accounts, specifically surprise overdraft fees and the practice of indiscriminately charging depositor fees to every person who deposits a check that bounces.

“Credit unions always put their members first, not their bottom lines, and follow the law by clearly disclosing their fees for products and services to consumers,” said Berger in response to the guidance. “The CFPB should not rely on scare tactics and legally non-binding guidance to delineate the bounds of its regulatory and supervisory authority.

“NAFCU supports greater transparency and accountability for the CFPB, especially in following the congressionally mandated notice-and-comment rulemaking process,” concluded Berger.

NAFCU flagged concerns related to this guidance and other recent CFPB efforts ahead of the bureau’s oversight hearings in Congress, and also has additional insights available in a Compliance Blog post and Compliance Monitor.

Regulation E liability concerns

In response to reports that the CFPB was reviewing Regulation E liability requirements, a group of Democrat Senators in July urged the bureau to issue new guidance to account for new scams and fraudulent activity via peer-to-peer (P2P) payment platforms.

The potential guidance would seek to ensure financial depository institutions cover losses from consumer authorized transactions that are the result of scams, a direct expansion of the current regulation that requires depository institutions to adopt error resolution procedures for electronic fund transactions not authorized by the consumer.

NAFCU’s Berger called this effort “deeply concerning,” arguing that an expansive interpretation of Regulation E could magnify credit unions’ exposure to fraud and curtail investments designed to help reach underserved communities, such as investments in brick-and-mortar branches. Rather than putting liability on credit unions, Berger recommended the bureau focus on ensuring fintechs have proper regulatory oversight and work to prevent fraud before it occurs.

NAFCU Senior Vice President of Government Affairs Greg Mesack also shared the repercussions of expanding Regulation E liability in a Wall Street Journal article, and a recent post on NAFCU’s Compliance Network further details the issue.

Stay tuned to NAFCU Today for ongoing efforts as NAFCU preps its 2023 advocacy agenda on behalf of the credit union industry and its 134 million members.