A number of NAFCU-supported bills have been introduced in the 118th Congress to help credit unions with regulatory burdens.
- The Credit Union Board Modernization Act, H.R. 582, passed the House by voice vote on January 30, 2023. This legislation, introduced by Reps. Juan Vargas (D-CA) and Bill Huizenga (R-MI) and backed by a bipartisan group of more than 50 cosponsors, would reduce the required number of annual board of directors meetings to six from 12 for credit unions in good condition. The Senate companion, S. 610, was introduced on March 1, 2023, by Senators Kyrsten Sinema (I-AZ), Bill Hagerty (R-TN), Alex Padilla (D-CA), and Thom Tillis (R-NC). It awaits further action. In the previous Congress this bill passed the House in September 2022 and was introduced in the Senate with bipartisan support.
- The Taking Account of Institutions with Low Operation Risk (TAILOR) Act, S. 362, was introduced by Sens. Mike Rounds (R-SD), Cynthia Lummis (R-WY), Thom Tillis (R-NC), Bill Hagerty (R-TN), and Steve Daines (R-MT) on February 9, 2023. This legislation would require federal financial regulators, including the NCUA, to tailor their regulatory actions in order to limit burdens on the institutions they oversee and to consider the cumulative effect a new rule would have on top of existing regulations. This legislation has been introduced in every Congress since 2015.
- The Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act was introduced by Rep. Kelly Armstrong (R-ND) and a bipartisan group of cosponsors in February 2023 and passed the House by voice vote on February 27, 2023. This bill would ensure interstate recognition of online notarizations and establish national standards for security and consumer protection. In the 117th Congress, this legislation passed the House in July 2022. The Senate version of this legislation in the previous Congress did not advance.
- Senators Alex Padilla and Kevin Cramer (R-ND) introduced legislation, S. 544, in February 2023 to improve credit unions’ access to the NCUA’s Central Liquidity Facility (CLF) by allowing corporate credit unions to purchase capital stock for a specific subset of members. This legislation was previously introduced in the 117th Congress.
- Senators Dan Sullivan (R-AK) and Mazie Hirono (D-HI) introduced the Veterans Member Business Loan Act, S. 539, which would exempt loans made to veteran-owned small businesses from the member business lending cap, on February 28, 2023. This legislation was previously introduced in the 117th Congress.
- Representative Alex Mooney (R-WV) introduced the Transparency in CFPB Cost-Benefit Analysis Act, H.R. 1313, on March 1, 2023. This legislation, which would ensure the CFPB is held to the same standard as other agencies when reviewing the cost-benefit analysis for its proposed rules, was previously introduced in the 117th Congress.
In the 117th Congress:
- The Credit Union Governance Modernization Act, which requires the NCUA to establish a streamlined method for credit unions to expel members for illegal or abusive behavior, was enacted into law in March 2022. The NCUA issued a proposed rule in September 2022 and is statutorily required to finalize this rulemaking by September 2023.
- The Fair Hiring in Banking Act removes some restrictions on employment in the financial services industry for individuals with past minor criminal convictions. A version of this legislation became law in December 2022 as part of the FY 2023 National Defense Authorization Act.
- The Expanding Financial Access for Underserved Communities Act, which would allow all types of credit unions to add underserved areas to their fields of membership and exempt business loans in underserved areas from the MBL cap, was introduced in the House and Senate. The bill passed the House Financial Services Committee in May 2022 and was included in a larger package of financial services related measures, the Financial Services Racial Equity, Inclusion, and Economic Justice Act, that passed the House in June 2022. This legislation did not advance in the Senate.
- The Member Business Loan Expansion Act and the Expanding Access to Lending Options Act were both introduced with bipartisan support. These bills would address various limitations on credit unions’ lending activities by raising the de minimis threshold under the MBL cap and allowing the NCUA Board to set loan maturity limits greater than 15 years.
In the 117th Congress, NAFCU members testified before various Congressional committees on behalf of the association to educate lawmakers on the pressing need to provide regulatory relief to the nation’s credit unions.
On February 9, 2022, Jetstream Federal Credit Union President and CEO Jeanne Kucey testified before the Senate Banking Committee’s Subcommittee on Financial Institutions and Consumer Protection at a hearing titled “The Role that Community Development Financial Institutions and Minority Depository Institutions Serve in Supporting Communities.” Kucey described the ways her credit union, which is a low-income Community Development Financial Institution (CDFI) and a Minority Depository Institution (MDI), has served its members in Florida and Puerto Rico during disruptions caused by the COVID-19 pandemic and Hurricanes Irma and Maria. Kucey also advocated for improvements to the CDFI and MDI programs, including special FHA and FHFA programs to support mortgages issued by CDFIs and MDIs, streamlining the CDFI certification process, allowing all credit unions to add underserved areas to their fields of membership, and increased funding for the CDFI Fund and the Community Development Revolving Loan Fund.
On September 1, 2021, Affinity Credit Union AVP of Commercial Lending Leslie Payne testified before the House Small Business Committee at a hearing titled “What Comes Next? PPP Forgiveness.” Payne described her credit union’s efforts to serve its members during the COVID-19 pandemic, especially those businesses that participated in the Paycheck Protection Program (PPP), and detailed difficulties with the Small Business Administration’s PPP forgiveness process. Payne also advocated for greater flexibility in PPP forgiveness for errors made in good faith.
On April 15, 2021, Premier Members Credit Union CEO Carlos Pacheco testified before the House Financial Services Committee’s Subcommittee on Consumer Protection and Financial Institutions at a hearing titled “Banking Innovation or Regulatory Evasion? Exploring Trends in Financial Institution Charters.” Pacheco described the value of technology partnerships to serve credit union members and urged Congress to level the regulatory playing field so fintechs do not evade supervision and gain an unfair competitive advantage over regulated entities like credit unions.
Agency Rulemakings and Actions
The Biden administration’s Fall 2022 Rulemaking Agenda, released in January 2023, indicates the regulators’ likely priorities on key issues. NAFCU analyzed Agenda items in an Insights post.
- NCUA: The NCUA is working to finalize its proposed rule on member expulsion, required by the Credit Union Governance Modernization Act.
- CFPB: The CFPB intends to finalize its Section 1071 small business lending data collection proposed rule and will issue a Section 1033 consumer access to personal financial data proposed rule.
- Automated Valuation Models: This interagency rulemaking effort remains on regulators’ agendas.