WASHINGTON— Credit unions should brace for the possibility of a government shutdown at the end of September, as signs from Capitol Hill point to continued delays in the federal budget process.
“We're once again behind schedule on Congress working on legislation to fully fund the government by the Sept. 30 deadline,” said DCUC Chief Advocacy Officer Jason Stverak. “We've been told to expect delays, and we've already begun talking to our credit union members about the likelihood of a government shutdown.”
Stverak noted that the warning is being issued earlier than in the past.
“But we want to ensure that our credit unions—and the entire industry—are prepared. Unless Congress reaches a major agreement or passes a continuing resolution, a shutdown on Sept. 30 is more than likely,” he said. “We’ve also been told that passing a CR could be more difficult this time around. That’s why we’re encouraging credit unions to start informing their members—especially those who rely on government paychecks or contracts—to be prepared for potential disruptions.”
Turning to the Community Development Financial Institutions Fund, America’s Credit Unions Chief Advocacy Officer Carrie Hunt said ACU’s advocacy team is pressing Congress to ensure the CDFI Fund is at least funded at the same level as in previous years.
“This fund is so incredibly important to our members,” Hunt said during a call with the media Monday. “Capital is king, and we need to be able to put that money to work. So, that is a big initiative of ours. We have met with Senator (Mike) Crapo and (Mark) Warner, who are the co-chairs of the Senate Community Development Finance Caucus. We have also have been working with Treasury…”
Stverak, who said DCUC is working with the Senate on CDFI funding, said his conversations with those on Capitol Hill suggest the CDFI funding currently is pegged at $275 million, below the $330 million in 2024.
“Thankfully, it's better than starting now at zero,” he said, citing the work of DCUC and its member credit unions to engage with CDFI Fund decision-makers. “We're going to continue to keep pushing for full funding, obviously, because we know because we know of the incredible impact these funds have in the communities our members serve.”
Stverak emphasized, however, that DCUC’s focus remains the National Defense Authorization Act (NDAA) and the growing possibility the Credit Card Competition Act and the Hawley/Sanders 10% credit card interest rate cap could be attached to the legislation (see related story).
CU Parity With Banks
As regulatory landscapes continue to shift for banks, Hunt said America’s Credit Unions is pushing to ensure credit unions aren’t left behind. She emphasized the organization’s commitment to achieving parity with banks in key areas like capital requirements and community reinvestment standards.
She said America’s Credit Unions remains focused on ensuring that credit unions achieve parity with banks, particularly as bank regulators are now working to ease some of the capital and risk-related requirements for banks.
“We don't have the exact same capital regime that banks do, but, ultimately, the NCUA is required to issue capital regulations that provide some level of parity to what banks have,” Hunt said. “It has been America's Credit Unions’ position that the NCUA has taken a very conservative approach to risk. And just because a credit union is large does not automatically mean it poses more risk.”
Hunt added that ACU will continue advocating for NCUA to ensure parity for credit unions if changes are made for banks.
Other items of interest in Washington this week:
TUESDAY
- The the House Financial Services Committee will mark up several bills, including the SMART Act, H.R. 4437, the Stop Agency Fiat Enforcement of Guidance Act, H.R. 4460, and the American Access to Banking Act
WEDNESDAY
- A House Small Business subcommittee will hold a hearing on the SBA disaster relief programs