|CUs Out in Force in D.C. on the Heels of Tax Reform Proposal
(Issue 1 of 5)
This year, the CUNA Governmental Affairs Conference had a record high 4,400 plus attendees including over 100 from Georgia! The mass of credit union individuals gathered in Washington to discuss (and take action on) key issues including:
The big reward for all credit unions (especially those at the GAC) was the February 26th official unveiling by Chairman Dave Camp of the House Ways and Means Committee of his anticipated tax reform plan - a plan that would make no changes to the credit union tax exempt status. When first released, there was initial concern that even though the corporate income tax exemption was preserved, federal credit unions could possibly be subject to unrelated business income tax (UBIT). However, that concern was addressed during a call arranged by CUNA with the staff from the Ways and Means Committee, who said it was never their intention to impose any additional taxes on federal credit unions. Further, committee staff shared that anything that would impose taxes on credit unions – including UBIT – was unintentional. That same message was confirmed during the Georgia participants’ meeting with staff from the office of Rep. Tom Price (R-6) – they also had heard of the concerns of credit unions and reached out to make sure that the draft would not put any additional tax on credit unions. GCUA appreciates Rep. John Lewis (D-5) and Rep. Price, the two Ways and Means Committee members from Georgia, for their support during the committee meetings to discuss the draft report.
The positive outcome with the tax reform draft came after months of challenging, unrelenting work by credit unions and the CUNA-League system urging Congress to “Don’t Tax My CU.” These efforts helped make a difference, and the “Don’t Tax My CU Tuesday” social media efforts on February 25th put this message in front of almost 5.3 million Twitter and Facebook followers on the eve of the above tax code reform discussion draft. And credit unions and trade press aren’t the only ones calling this a win for the industry; Politico highlighted credit unions as one of the “winners” in a list of who gained and lost in the reform proposal. The news for credit unions was especially noteworthy when so many other entities could face major “hits” under the proposal, such as a new tax on financial firms with assets greater than $500 billion labeled by U.S. regulators as “systemically important” to the stability of the broader economy. If passed into law, this would require these firms pay a quarterly excise tax equal to 0.035% of their total consolidated assets that exceed the $500 billion threshold.At the GAC, credit union representatives were out in force on February 26th and 27th on Capitol Hill hitting on all the major talking points: taxation, member business lending, housing finance reform, data security and credit union charter enhancements. This annual event is a valuable touch point for meeting face-to-face with lawmakers, and Bobby Michael, CEO of CORE CU, was highlighted in CUNA’s News Now stating that he was most focused on just getting the credit union message out to legislators. "If you repeat it enough times it sinks in," he said. That sentiment seemed to hold true as all the Georgia participants felt this year’s visits were some of the best yet. The legislators seemed in-tune with credit union issues and focused on the message. A special thank you to all of the 30 credit unions who traveled to D.C. to speak on the issues vital for all Georgia credit unions.
|U.S. House Passes Flood Insurance Bill (Issue 2 of 5)
On March 4th the U.S. House of Representatives passed the Homeowner Flood Insurance Affordability Act (H.R. 3370) by a 306-91 vote. The Georgia delegation had seven voting for the measure (all the GA House Democrats plus Reps. Jack Kingston (R-1) and Rob Woodall (R-7)) and seven in opposition (the rest of the GA Republican contingent).
|Bill to Provide Consistency with Overdraft Fees Passes State Senate (Issue 3 of 5)
On Thursday, March 6th the Georgia Senate passed HB 824 by Rep. Richard Smith (R-Columbus) which will bring consistency for state-chartered financial institutions. This bill has been lobbied heavily by GCUA to help move it through the legislative process, as it will protect credit unions. The legislation will bring consistency and clarity to overdraft programs at state-chartered credit unions and banks, and asserts that overdraft fees are not subject to usury laws and are not considered interest. This has been sought as there have been legal challenges on overdraft, as well as a challenge to the constitutionality of the July 2013 Bank Overdraft Fee Declaratory Order issued by the Georgia Department of Banking and Finance. This bill had garnered some opposition in the Senate committee hearings, and there are lobbying interests that would like to see the bill stopped. As such, lobbying efforts to support this legislation continue.
With so many opportunities to alter or derail a bill (and time being of the essence), GCUA continues to educate legislators on the importance of passing this legislation, which clearly states that overdraft fees imposed by state-chartered institutions in connection with deposit accounts are not subject to Georgia's usury laws. Note: The Atlanta Journal-Constitution’s bill resource assigns an educated guess on the likelihood of a bill’s passage.AJC: 53%
|State Legislature: Six Legislative Days Remaining (Issue 4 of 5)
As of press time, the state Legislature is on the 34th day of the 40-day session. With six (six!) days remaining and the majority of issues still active in the fluid process, it’s a hectic pace with legislators working to move their issues forward. And, as qualifying (see article below) was held on the floor below the House and Senate chambers this week, it created an even greater frantic undercurrent with legislators as their competition was literally downstairs kicking off their respective campaigns. The House alone voted on more than 50 bills on Monday, March 3rd until around 11:00 pm that evening! From a credit union perspective, there was no shortage of activity this week on bills of interest, in addition to the overdraft legislation above:
These above bills are in addition to the 200-plus pieces of legislation being monitored to protect credit union interests, including bills that are potential vehicles for HOA attempts to supersede the lien priority status of financial institutions. Stay tuned; next week the Legislature will be in session Monday through Thursday and the volume of bill activity will continue!
|Election Season’s Official Kickoff (Issue 5 of 5)
The qualifying period for candidates to run in the May 20, 2014 primary/nonpartisan election was this week, and generated multiple announcements as legislators kicked off their re-election campaigns or opted to retire from the Legislature, and new office-seekers announced their candidacies. Qualifying continues as of press time, but to see who has officially kicked off their campaigns please click here.