WASHINGTON–Credit unions have won one and lost one after a House committee marked up a number of bills, including one piece of legislation that had their strong backing and another—which would give NCUA oversight of third party vendors—that CUs have strongly opposed.
First, the bill for which credit unions have been advocating.
The House Financial Services Committee passed credit union-supported approve HR 7003, the Expanding Financial Access for Underserved Communities Act, which CUNA has called the “the most significant proposed update to the Federal Credit Union Act since 1998.”
HR 7003, which passed on a 27-22 vote, would:
- Allow all federal credit unions to add underserved areas to their field of membership
- Exempt business loans made by credit unions in underserved areas from the credit union member business lending cap
- Expand the definition of an underserved area to include New Markets Tax Credit areas and any area that is more than ten miles from the nearest financial institution branch.
- Committee Chairwoman Maxine Waters (D-CA) introduced H.R. 7003 shortly after the 2022 CUNA Governmental Affairs Conference.
According to CUNA research, over 750 census tracts are financial deserts, and a net 7,800+ bank branches closed between January 2005 and March 2021. During the same period, more than 1,400 net credit union branches opened, the association said.
CUNA Response
“Thank you to all on the committee who supported this important legislation and credit unions’ efforts to promote financial well-being for all,” said CUNA President/CEO Jim Nussle. “This legislation provides a commonsense market-based solution to reach the nearly one in five households that are un- or underbanked across the country.”
NAFCU Response
“Today, lawmakers chose to put credit unions and the consumers they serve first. Advancing the NAFCU-backed Expanding Financial Access for Underserved Communities Act is a step forward in helping the credit union industry expand support to underserved communities, especially those hit hardest because of big banks’ declining presence in these areas,” said NAFCU President and CEO Dan Berger. “Moving the CDFI Bond Guarantee Program Improvement Act closer to law will allow the program to continue its important work of helping fund the economic development activities in underserved communities. NAFCU is proud of our member credit unions for championing these issues and we will continue to work with Congress as these bills progress.”
Cybersecurity Bill Would Give NCUA More Authority
The House committee also marked up HR 7022, the Strengthening Cybersecurity for the Financial Sector Act of 2022.
“The Committee’s passage of H.R. 7022 is an important step forward in closing a regulatory blind spot. The NCUA’s Inspector General, the Financial Stability Oversight Council, and the U.S. Government Accountability Office have all called for the NCUA to have the same authority over third parties as federal banking agencies,” said NCUA Chairman Todd Harper, who, along with other board members at the agency, has been calling for the power to oversee vendors. “This authority is critical for mitigating the very real national security, cybersecurity, anti-money laundering, consumer protection, safety-and-soundness, and other risks to the credit union system and the broader financial services sector.
As for HR 7003, which would expand FCU’s FOM, Harper added, “HR 7003 is also an important piece of legislation that would allow all federal credit unions to add underserved areas to their fields of membership. These changes are essential to increasing access to safe, fair, and affordable financial services in rural communities, communities of color, and other underserved places. They would also advance financial inclusion within our nation’s financial system.”
Trade Groups Join in for Clarification on 603 Notifications
Separately, NAFCU and CUNA have joined with several trade associations in pushing the Alliance for Telecommunications Industry Solutions (ATIS)/ Session Initiation Protocol (SIP) Forum NNI Task Force, which regulates call network providers, to provide clarity when callers receive a SIP Code 603 notification.
SIP Code 603 was designed to signal to callers, like credit unions, that a call recipient declined a call, but the notification does not distinguish between instances of actual recipient declinations and more common network-level call blocking, according to a letter the trade groups sent.
Credit unions often make automated calls to notify members of important, timely information. Carriers are responsible for reviewing certain call data that crosses their networks and helping tamp down on potentially unlawful robocalls; some carriers allocate heavy resources to determine the lawfulness of call traffic, while some decline to carry potentially unlawful calls altogether, the letter states.
‘Not Helpful’
“Unfortunately, blocking all calls that are potentially, but not confirmed as, unlawful calls, is not helpful for credit unions trying to relay important information to their members,” CUNA, NAFCU and the other organizations stated. “When credit unions receive SIP Code 603, the notice offers very little detail on why the calls were blocked, who chose to block the call (the recipient or the carrier), and what can be done to mitigate it being marked as unlawful for the future.”
The group urged the Task Force to develop an “an enhanced version of SIP Code 603 (SIP Code 603+) that would allow the caller to distinguish between a 603+ Code that indicates the called party declined the call from the receipt of a 603+ Code that signals that the Voice Service Provider blocked the call.”
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