WASHINGTON–Independent of each other, representatives of both NAFCU and CUNA have both called it a “busy week” on Capitol Hill, with numerous bills, hearings and an NCUA board meeting all on the agenda.
In addition to draft legislation in the House that would give NCUA third party oversight authority (see related story, and earlier reporting here), other draft legislation is also circulating in a House Financial Services Committee memorandum on Capitol Hill, all of it related to a Wednesday hearing featuring four prudential regulators, including NCUA.
Letter to be Sent
CUNA’s chief advocacy officer, Ryan Donovan, said the trade group will likely send a letter to Congress on Tuesday afternoon that also addresses:
- HJ Res 35, a resolution of disapproval of the Office of the Comptroller of the Currency’s so-called “true-lender rule.” This is the House equivalent of the Congressional Review Act Resolution that passed the Senate last week that calls for an end to authority granted by the OCC that allows fintechs to essentially borrow certain banks’ charters to make high-rate loans. , CUNA supported the CRA that passed the Senate.
- The Central Liquidity Facility Enhancement Act, which would make permanent some of the CLF expansions and authorities that were included in the CARES Act. CUNA also supports that proposed legislation.
- The Expanding Financial Access for Underserved Communities Act, which would do three things: Permit all FCUs to add underserved areas to FOM; exempt member business loans made by CUs in underserved areas from the MBL cap, and expand the definition of underserved areas in the FCU Act to include communities lacking a depository institution within 10 miles. Donovan said CUNA and the California CU League have been working on that legislation for months and are strongly supportive.
Additional Comment
Donovan said in addition to all that, CUNA also plans on sending comments on some other matters before NCUA, including views on NCUA’s continued work on COVID-19 policy accommodations, the need for NCUA to have flexibility on PCA, input on the agency’s journey related to diversity, equity and conclusion, and concerns over any adjustments to the NCUSIF.
NAFCU Response
Carrie Hunt, EVP and general counsel with NAFCU, said the group also supports proposals related to expanding credit union services into underserved areas. The agency currently has out for comment a proposal on the definition of so-called “service facilities.”
NCUA Board Meeting
There are two issues on the agenda for Thursday’s NCUA board meeting: a proposal related to derivatives powers for credit unions, and an update on the NCUSIF.
Credit unions and their trade groups have been paying particular attention to the latter, as it could involve a potential premium assessment to CUs to restore the NCUSIF’s operating ratio.
“The derivatives proposal is something we have asked for for a while,” said Hunt. “We will see how many credit unions take advantage of it, but even if it’s just a handful, we support more tools in the toolbox.”
As for the NCUSIF, Hunt repeated NAFCU’s position that there is no need to charge a premium and that there is an opportunity to put in place a lengthy restoration pan.
A premium “is unnecessary this year,” said Hunt. “There is no trouble in the system.”
NCUA Risk-Based Capital Proposal
As CUToday.info has reported, in addition to CUNA, NAFCU, NASCUS and state associations, the banking trade groups have also filed a comment letter on an NCUA proposal related to its risk-based capital rules.
As CUToday.info reported, the American Bankers Association called for the NCUA plan to be scrapped, saying rules for banks that are already in place are a better model.
“This was just an (advanced notice of proposed rulemaking),” reminded Hunt. “We support credit unions having parity with banks. In fact, because credit unions are conservatively run and member owned, I would argue our capital rules should be less stringent than the banks.”
Hearings This Week
The other hearings CUNA said it will be watching this week on Capitol Hill include:
Tuesday
House Small Business Committee hearing: Examining the role of Community Development Financial Institutions and Minority Depository Institutions in Small Business Lending. Among those scheduled to testify are Aissatou Barry-Fall, president and CEO of Lower East Side People’s FCU in New York.
Senate Committee on Banking, Housing and Urban Affairs: Reauthorization of the National Flood Insurance Program Part I
Senate Committee on Finance hearing: Funding and Financing Options to Bolster American Infrastructure
Wednesday
Senate Committee on Appropriations: Internal Revenue Service: Narrowing the Tax Gap and Improving Taxpayer Services
Thursday
Senate Committee on Banking, Housing and Urban Affairs: 21st Century Communities: Expanding Opportunity Through Infrastructure Investments