By Ray Birch
WASHINGTON—America’s Credit Unions and the Defense Credit Union Council each held meetings Monday that addressed the state of the credit union system following the shake-up at NCUA.
The two meetings, both held at 1 p.m. ET, approached the topic in very different ways.
As CUToday.info has reported, President Trump last week removed NCUA Democratic Board Members Todd Harper and Tanya Otsuka, which sparked a great deal of concern among credit unions about the future of NCUA and the movement.
The Defense Credit Union Council outlined action steps that need to be taken to make sure credit unions prosper in this period of uncertainty, with much of that centering on preserving credit unions’ tax-exempt status.
America’s Credit Unions, during its Industry Update webinar, covered a wide range of topics, largely to answer credit union questions. ACU invited all of the leagues and its credit union members to attend.
ACU spoke about, and addressed attendee questions, on a wide range of topics, including the changes at NCUA and what may be expected from the agency going forward—the CU tax fight, state chartering during this period of uncertainty at NCUA, interchange, overdraft legislation and more. It also provided an update on its efforts to preserve the credit union tax exemption.
Anthony Hernandez
Noting the primary matter in front of CUs today is the tax fight, DCUC Chef Advocacy Officer Jason Stverak told CUToday.info it is important that, “All credit union leaders, all credit union associations and all credit union strategic partners come together to ensure we are all working together—communicating, cooperating, collaborating—to ensure that credit union interests are protected across Capitol Hill.”
Highly Effective
Following the meeting, Stverak—who co-hosted the virtual event with DCUC President and CEO Anthony Hernandez—called the effort highly effective and productive.
“This was a great first step,” he said.
DCUC President and CEO Anthony Hernandez pointed out that credit unions have seen “enough” turmoil in the last few weeks regarding industry changes.
“Whether it is the industry's tax exemption, NCUA independence, the ongoing Credit Card Competition Act, or even preserving the CDFI Fund — every day seems like one crisis after another," he said.
During the one-hour meeting, DCUC introduced and outlined its Credit Union Industry-Wide Action Plan. One key tactic outlined: Setting and reaching a goal for the entire credit union movement—both trade associations, the leagues and individual CUs—to work to secure support for the CU tax exemption from a majority of lawmakers in both the House and the Senate.
"Our approach was to move beyond a simple informational meeting to drive wider industry participation from many of the other trade associations into an actual campaign plan,” stated Hernandez. “We also included our league partners and their governmental affairs personnel. Plus, we extended our invitation to credit union system partners who have just as much to lose if the industry were to be taxed.
"This plan features several lines of effort, objectives, and desired conditions for ensuring the industry's tax exemption is secure, the NCUA continues as an independent agency other industry issues continue to be addressed,” continued Hernandez.
Hernandez said the plan can either be duplicated or tailored to each organization.
“The first action step is to move out, starting today, since we have very little time left on the congressional calendar,” said Hernandez, who added the plan “illustrates the power of our movement so no one messes with credit unions again."
Jason Stverak
Not Just Rallying Cry
Stverak emphasized Monday’s meeting was more than just a rallying cry.
“It was about creating a plan to improve and increase cooperation and collaboration within the credit union movement and industry to address issues like the credit union tax status that threaten credit unions, as well as build the foundation for a long-term cooperative system,” he said.
Jim Nussle
Stverak talked about the meeting being a start to constructing an even stronger advocacy engine for credit unions through system-wide cooperation.
“So, that after the tax fight is won, credit unions won’t have to start this process again. We will have built an advocacy engine that all credit union leaders and associations can participate in to protect our industry,” he said.
ACU President and CEO Jim Nussle hosted the trade association’s meeting Monday, emphasizing the organization is fully committed to winning the tax fight and that he is fully engaged in that process. As CUToday.info reported, Nussle recently announced his intent to retire from ACU.
Early in the event Nussle addressed the situation at NCUA, now with a single board member.
On potential new members for the NCUA board, Nussle said: “I'd like to see a very robust process for succession at the NCUA. I hope that we continue to attract very qualified people for those positions.”
Nussle also stated that NCUA Chairman Kyle Hauptman addressing publicly what is happening at the agency is needed quickly.
Nussle said no matter the situation at NCUA, ACU will “continue to monitor all of what the agency is doing. We will continue to be strong advocates, and watching what they do, the processes they use, making sure that it is fair and balanced.”
During the one-hour webinar, ACU’s Ann Petros talked about what actions NCUA could take with one board member. She noted NCUA has taken the position that a quorum of one is possible.
“So, in theory Chairman Hauptmann can act and take all actions that a three- or two-member board can take,” she said. “That includes voting on, approving or rescinding rulemakings. However, if you look at that precedent from 2002 when former Chairman Dennis Dollar was the sole board member for a couple months, he did not take any action at that time to either rescind or approve a rulemaking. Should Chairman Hauptman move forward with some sort of rulemaking—whether it is a to eliminate an existing regulation or a brand-new rulemaking, that would be new. That would set a precedent. And it doesn't mean it's bad, or right or wrong. It just means that it is new, uncharted territory.”
Ann Petros
Petros added if Hauptman were to take an action step, the Administrative Procedures Act would have to be followed.
Nussle concluded by pointing out ACU has been fully engaged with the leagues and has been holding regular weekly meetings with league representatives to update them on the progress of its efforts to protect the CU tax status, and to discuss other matters in Washington and Alexandria. Nussle noted its grassroots "Don't Tax My Credit Union" advocacy campaign this year has generated nearly 500,000 letters to legislators and that its digital ad campaign, introduced in January, has been highly successful. Nussle added that ACU has been working diligently to get in front of key officials in the new Administration, noting he was actively meeting with officials in the Old Executive Building even before some of the new White House staff had received their employee credentials.
Nussle added that, with Congress and the administration publicly looking to move the tax bill forward quickly, ”this is what we’re going to have to focus on for the next few months. Until this bill is signed and we’re not in it, we can’t act like we’re out of the woods, because we’re not.”
Same Day, Same Time
Both the DCUC meeting and ACU event started Monday at 1 ET and ended at 2 ET. That led one league president, who stated, on the condition of anonymity, that ACU's timing of Monday’s meeting was an unfair move, calling it “copycat.” DCUC set its meeting date last Wednesday.
ACU responded by saying America’s Credit Unions hosts several calls a week with its league partners.
“As the national trade association for all credit unions, we are responsible for keeping our members directly informed of industry updates and news in real time, and today (we) hosted a follow-up member webinar to address last week’s NCUA announcement and provide an update on the tax battle,” an ACU spokesperson said. “Attendance included more than 1,300 credit unions representatives, as well as 130 representatives from leagues and system partners. We appreciated Tony’s invitation and attended the (DCUC) call this afternoon with other trade associations, partners and vendors.”
"DCUC was not invited to take part in ACU's meeting, so I cannot comment on what was discussed,” said Hernandez. “However, I do hope ACU's meeting was meaningful for those who dialed in at the same time and missed DCUC's meeting. We did invite ACU to participate in our meeting as early as last Wednesday and several ACU staff members accepted the meeting invite"