|State Legislature Adjourns! (Issue 1 of 6)
This week the state Legislature held marathon hours for their final two days of the session, adjourning as of midnight on Thursday, March 20th in a flurry of activity with multiple amendments and amendment attempts onto bills still traveling through the process. And this was amidst the various protest groups on different issues this week! With long hours, frayed nerves and near exhaustion with some legislators, it was not an “ideal” lobbying environment for any interest group. However, from a credit union perspective the two high-profile bills of importance to the industry passed the entire legislative process last week, and were not caught up in the unpredictability of the final days:
|How You Can Make a Difference
(Issue 2 of 6)
Interested in the state session? Congress? Politics in general, or not at all? It doesn’t matter what your level of interest is, ALL of us can make a difference and help shape legislation by making a connection and building a relationship with elected officials. And with the close of the state session literally mere hours ago, now is an ideal time to connect.
Why is this important to your credit union? The likelihood for legislative success is proportional to the relationship a legislator has with the industry and the understanding of the issues. As such, it is important for people in credit unions to engage with their legislators as these are the individuals who can decide how you serve your members. And, it is important to engage with your legislators EARLY. Your time establishing personal relationships with legislators creates understanding. It increases the likelihood that they will listen on issues. And, it gives you credibility with other lawmakers and within your community, regardless how high of aspirations a legislator may have. Engage with your legislators early and often; it creates its own positive domino effect for your credit union and the entire industry.
Not sure how to get started? Many credit union leaders continually grow their personal connections with legislators throughout the year by engaging them in credit union events and at civic functions. However, an easy way to get started is to simply reach out to your legislators with a “thank you” for their time serving in the state Legislature, regardless of political party affiliation. To access your legislators please click here.
|Flood Insurance Bill Passes
Congress (Issue 3 of 6)
The Homeowner Flood Insurance Affordability Act (H.R. 3370) has moved to President Barack Obama's desk to be signed into law after the Senate approved the bill on March 13th. The Senate approved the bill on a 72-22 vote, and passed the House earlier this month by a 306-91 vote. The bill would delay planned increases in National Flood Insurance Program (NFIP) premiums until the Federal Emergency Management Agency puts in place a plan to ensure they are implemented affordably. A range of other NFIP fixes has been discussed in recent months, and NCUA joined the Federal Reserve, the Farm Credit Administration, the FDIC and the OCC to ask whether federal financial regulatory agencies should adopt additional regulations on the acceptance of flood insurance policies issued by private insurers. The joint agency proposal would:
|Housing Finance Reform Draft Includes Change for CU Concerns
(Issue 4 of 6)
On March 11th, Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo announced they reached an agreement on a housing finance reform proposal after a series of hearings since last fall. With the release of the Johnson-Crapo housing finance reform details, CUNA has confirmed an important modification for credit unions from an earlier draft: The cap for membership in a mutual securitization company was drastically increased, as recommended by credit union testimony last November and in subsequent meetings with legislative staff on Capitol Hill. The Johnson-Crapo draft bill is lengthy; 425 pages of reforms on how to overhaul the housing finance market, as well as on what to do with government-owned Fannie Mae and Freddie Mac.CUNA supports housing finance reform but has insisted throughout discussions that credit unions must continue to have unfettered access to the secondary market under any revised system. CUNA backed an idea found in an earlier bill, S. 1217, which proposed a mutual securitization company to provide credit unions and other smaller lenders access to securitizing their mortgages, access currently provided by Fannie Mae and Freddie Mac. However, CUNA had criticized a $15 billion-in-assets cap for participation in the mutual to be far too low. As CUNA Chief Economist Bill Hampel emphasized during one of the hearings: "We believe that this cap is far too low, and would suggest that lenders of almost any size should be able to use the mutual, so long as they do not themselves issue covered securities. Restricting the mutual to serving just smaller lenders would preclude achieving necessary scale economies." The Johnson-Crapo bill raises the proposed ceiling to $500 billion in assets – a half-trillion dollars – large enough to serve as a robust vehicle to the secondary market for credit unions.
|Loan Parity Bill to Help CUs Support Affordable Housing (Issue 5 of 6)
Enactment of the Credit Union Residential Loan Parity Act (H.R. 4226) would enable credit unions to better meet the needs of their members and also would contribute to the availability of affordable rental housing. A new bill introduced by Reps. Ed Royce (R-CA) and Jared Huffman (D-CA), if passed, would amend the Federal Credit Union Act to exclude from the 12.25%-of-assets member business lending cap any credit union residential loans made for the purchase of a one- to four-unit, non-owner-occupied residential dwelling. The bill would address an existing disparity in the treatment of those loans made by banks as compared to those made by credit unions.
|Insight Into NCUA Board Nominee
(Issue 6 of 6)
NCUA board member nominee J. Mark McWatters said at his confirmation hearing on March 13th that a risk-based capital approach "makes sense" for credit unions, but warned the "devil is in the details" of any proposal. He told Senate Banking Committee members that examining the overall issue in general and the NCUA's proposal specifically would be high on his list of priorities if he is confirmed to join the NCUA board.