WASHINGTON–Both the House and the Senate are back in session this week, and the agenda includes appearances by NCUA Board Chairman Rodney Hood before both bodies. Separately, ahead of an NCUA board meeting next week, CUNA has sent a comment letter to the agency on its budget proposal.
Impeachment-related hearings and issues will get the headlines, but as NAFCU’s Carrie Hunt told CUToday.info, there is much going on behind the headlines that is every bit as impactful as that getting the attention.
“A lot of business needs to be accomplished before the end of the year,” said Eli Joseph, deputy chief advocacy officer with CUNA.
Hood will testify before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday, joining with other federal regulators as part of regular reviews held by Congress.
“It’s a great opportunity to highlight the positives of credit unions,” said Hunt.
One critical issue before Congress is a new budget measure necessary to fund the federal government beyond mid-December and avoid another shutdown. Hunt does not expect any funding measure will be paired with the National Defense Authorization Act (NDAA), which remains in conference committee and which may or may not include language giving banks equal access to military bases as credit unions currently have. The status of the NDAA remains uncertain, confirmed Hunt.
The Agenda
On the congressional agenda this week:
Wednesday
- The Senate Commerce Committee Wednesday will hold a hearing to examine legislative proposals to protect consumer data privacy. The hearing follows by a week the release of a comprehensive data privacy and security proposal
Thursday
- The House Financial Services Committee will review the administration's deregulatory agenda and its impact on financial stability
- A House Financial Services Committee subcommittee will examine the Federal Housing Administration and how its efforts impact homeownership
Friday
- The House Financial Services Committee Task Force on Artificial Intelligence will discuss how AI is transforming capital markets and jobs in the finance industry
Also in Washington
- The CFPB has also indicated it will issue its new rules around remittances; NAFCU noted it has urged the agency to lift its exemption around remittances
- Separately, following NCUA’s recent budget briefing, Hunt told CUToday.info, “It’s clear NCUA has done a lot of work on the budget. But it’s not just about a point in time, it’s about accountability throughout the year. It seems the pendulum is swinging from rulemaking to the examination side. We don’t think credit unions need more regulations or exams. This environment allows for more flexibility and we are going to do more work in that area.”
CUNA Letter to NCUA on Budget
Separately, CUNA has sent a letter to NCUA on its proposed budget. The letter from Chief Economist Mike Schenk expresses support for aspects of the proposed budget—particularly the transparency of the process—but also details some concerns on the part of the trade association.
In the letter CUNA said the agency’s proposed budget increase is “reasonable” in the context of approximately 2% inflation and with the 6% increase in credit union operating expenses. CUNA said it also recognizes how personnel costs have a dramatic effect on overall agency expenditures and that regulatory and contractual obligations drive a substantial portion of the changes in overall agency budgeted expenditures each year.
But CUNA said it has concerns over several areas in the budget, including:
- Regional consolidation. While CUNA said supports the focus on cost savings and efficiency in consolidating regions, it has resulted in some “inconsistency” in the interpretation and application of rules and regulations.
- Examination cycle. An extended exam cycle is a helpful tool, CUNA said, but should be expanded to more credit unions. The letter calls for the threshold to be increased to $3 billion
- Share insurance fund Normal Operating Level. CUNA said it upports the agency’s action last year to decrease the NOL to 1.38%, but it is urging the board to ultimately reduce it back down to 1.30%.
- Expansion of the Office of Consumer Protection. While board member Todd Harper’s proposal may be “well-intentioned,” CUNA said it believes altering the agency’s risk-focused examination process and substantially increasing examination-related expenditures is not warranted at this time.
The NCUA board will vote on the proposed budget at its Dec. 12 meeting.