February 08, 2023

NAFCU outlines needed regulatory relief for credit unions ahead of hearing

CapitolAhead of today’s House Financial Services Subcommittee on Financial Institutions and Monetary Policy hearing on revamping and revitalizing banking, NAFCU’s Brad Thaler offered input on areas of financial services regulation that need updating to help credit unions continue to best serve their members.

During the hearing, the subcommittee will discuss data privacy legislation to amend the Gramm-Leach-Bliley Act being worked on by Chairman Patrick McHenry, R-N.C. The bill contains robust state pre-emption that is part of our data privacy principles NAFCU’s principles for a federal data privacy standard. In the letter, Thaler, NAFCU’s vice president of legislative affairs, calls on the subcommittee to consider the association’s principles when engaging on the topic of a financial data privacy bill, as the association has long advocated for a national data privacy standard. Yesterday, ahead of the hearing, McHenry released an updated version of his privacy bill.  NAFCU is reviewing the updated proposal.

Thaler offered thoughts on three other bills that will be discussed during the hearing:

  • on the Bank Service Company Examination Coordination Act, Thaler reiterated the association’s opposition to expanding the NCUA’s authority to examine third-party vendors for credit unions; and
  • on the Promoting Access to Capital in Underbanked Communities Act and the Promoting New and Diverse Depository Institutions Act, he urged the subcommittee to include legislation allowing credit unions to add underserved areas to their fields of membership with all efforts to help underserved and underbanked communities.

In addition, he offered additional areas where credit unions would urge the subcommittee to consider action, such as:

  • overburdensome regulatory actions from the CFPB, including the bureau’s current ignoring of provisions included in the Dodd-Frank Act to protect community institutions, such as its authority under Section 1022 to provide exemptions to smaller entities and its requirements to hold Small Business Regulatory Enforcement Fairness Act (SBREFA) panels for rules that will impact smaller entities – among other topics NAFCU has been vocal on;
  • modernization of the Federal Credit Union (FCU) Act, including modernizing lending provisions – such as the burdensome member business lending cap – as well as investment options for credit unions and flexibility for the FCU maximal interest rate; and
  • ensuring fintech companies and regulated financial institutions compete on a level playing field where smart regulations and consumer protections apply to all participants.

Read the full letter. The association will monitor the hearing – happening at 10 a.m. Eastern – and will remain in close contact with Congress to ensure credit unions voices are heard.