WASHINGTON—America’s Credit Unions has sent two letters to Capitol Hill outlining its positions on privacy legislation and the relationship between CUs and the FHFA, respectively.
In the letter, the trade group wrote to a House Energy and Commerce subcommittee that draft legislation around data privacy falls short and that it has concerns.
The letter was sent ahead of a hearing on legislation unveiled last week.
“Credit unions strongly support the idea of a national data security and data privacy regime that includes robust security standards that apply to all who collect or hold personal data and is preemptive of state laws,” ACU President/CEO Jim Nussle wrote. “We firmly believe that there can be no data privacy until there is strong data security.”
Three Tenets
America’s Credit Unions said it has outlined three tenets to be addressed in any new national data privacy law and believes the draft legislation falls short in these areas:
- A recognition of Gramm-Leach-Bliley Act (GLBA) standards in place for financial institutions and a strong exemption from new burdensome requirements. The bill does not have an entity-level exemption for those complying with GLBA, instead it has an “data-level” exemption that could leave credit unions subject to burdensome new rules and regulations
- A strong federal preemption of varying state laws. The draft legislation generally preempts state laws, but there are many carveouts for existing state laws, some of which are concerning to America’s Credit Unions
- Protection from frivolous lawsuits created by a private right of action. The bill generally establishes a broad private right of action covering most parts of the bill.
Credit Unions ‘Essential’ to FHFA
Separately, the Senate Banking Committee has been reminded credit unions are an “essential partner” to the Federal Housing Finance Agency (FHFA).
America’s Credit Unions made that point in a letter to the committee ahead of its annual oversight hearing of federal housing regulators,
“During 2023, credit unions originated $105 billion in first-lien mortgages, and they sold more than 25% of those mortgage loans into the secondary market,” Nussle wrote. “Therefore, credit unions have a considerable interest in ensuring that the FHFA-regulated entities, which include the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation and the Federal Home Loan Bank System (FHLBanks), operate effectively and efficiently and satisfy their core missions to benefit low- and moderate-income borrowers and communities.”
Support for Change
Nussle expressed the organization’s support for the FHFA’s decision to rescind changes to its guarantee fees, adding that “any change to the single-family pricing framework, including any change to guarantee fees, requires transparency and industry engagement.” He also noted that access to FHLBanks is key for credit unions as critical sources of liquidity.
In addition, he stressed credit unions’ work to close gaps in housing access.
“Credit unions have long had a history of rent-to-own programs; first time homeowner programs; financial literacy and wealth building programs to assist millions of Americans on their path to financial well-being,” wrote Nussle. “Data consistently shows that credit unions are at par or exceed our for-profit counterparts in the financial services marketplace.”
Nussle concluded by urging the committee to modernize field of membership restrictions to allow credit unions to serve more Americans and improve access to housing.
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