JANUARY 30, 2015
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Grassroots 2015 Grassroots Academy (Issue 1 of 5)
The latest edition of the Grassroots Academy provided credit union people from across Georgia with valuable insights into the workings of Georgia government, including both the legislative and executive branches.

 
     
  State Legislative Activity as of Day 8 (Issue 2 of 5)
This week's activity in the Georgia Legislature included the first 2015 meetings of many Senate and House committees; legislation introduced included bills dealing with foreclosure, tax exemptions and code revisions, among others.

 
  Pushing Congress on Data Security (Issue 3 of 5)
A group of trade organizations, including CUNA, has presented Congress with a set of principles to act as a guide to data-security legislation, and a House subcommittee held a hearing on such legislation on Jan. 27.

 
  Supreme Court Rejects Interchange Lawsuit (Issue 4 of 5)
The U.S. Supreme Court declined to hear a case brought by a group of retailers over debit-card interchange fees. The move, positive for credit unions, ends retailers' attempts to reduce the fees, which they pay to card issuers.

 
  New Tactic by Competitor: Tax Refunds Via Wal-Mart
(Issue 5 of 5)

Wal-Mart announced a program under which a taxpayer who is due an income-tax refund can opt to get that refund in cash from any Wal-Mart store, providing he or she had filed a tax return through a participating tax preparer.

 
 
 
Grassroots Academy 20152015 Grassroots Academy (Issue 1 of 5)

On Tuesday, January 27th credit union leaders from all across Georgia convened at the State Capitol for the seventh Grassroots Academy, and it was the largest group to date! The day was packed with legislative and political speakers who provided personal viewpoints into the federal and state legislative forces that impact credit unions – and what credit unions can do to make their own impact. This event, held around the onset of the state legislative session, is the opportunity to grow understanding of the legislative issues, gain the tools to expand one’s grassroots strength, and widen the scope of influence credit unions have with legislators. Put simply, it is the information and resources in one day to help credit unions continue to serve their members now and in the future! This year credit unions:

  • Were greeted by Secretary of State Brian Kemp, who provided details on the inner workings of the State Department’s efforts in elections and voting for Georgia.
  • Heard the perspectives of Department of Banking and Finance Commissioner Kevin Hagler on upcoming legislation the Department will be seeking, with a verbal synopsis of the positive changes for credit unions.
  • Received an immersion into the power of grassroots and using one’s voice to shape issues from Charlie Harper, executive director of PolicyBEST and editor-in-chief of Peach Pundit.
  • Saw firsthand the political involvement strategies in play with credit unions in Montana from Tracie Kenyon, Montana Credit Union Network President/CEO, and Al Vukasin, CEO of Bear Paw Credit Union. Kenyon shared perspectives on engaging in partisan communications for a statewide candidate, and Vukasin provided insight into how his credit union got engaged, how their involvement was rolled out from a board-level "buy-in" to action, and their results.
  • Met the newly appointed Senate Banking Chairman, Senator Burt Jones (R-Jackson), who joined the group for lunch to greet the credit union industry and share his background and focus for the Senate Banking Committee.

With the state session in full swing, the involvement of these 60-plus credit union individuals helped demonstrate the grassroots leverage of the industry. Thank you to all the attendees for making it a lively and fun event! To see the day as it unfolded, visit GCUAGov on Twitter or with the hashtag #CUGrassroots.

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LegislatureState Legislative Activity
as of Day 8 (Issue 2 of 5)

The State Legislature resumed work this week, bringing the session up to eight days of its 40-day schedule, with multiple hearings as many of the Senate and House committees met for the first time in 2015. There are 65 committees (not including separate study committees) between the two chambers; these committees are where the majority of the debate and amendments in bills take place, and often consume most legislative days (and even non-legislative days) with hearings. Watch for issues to arise quickly as these hearings continue. And of course, bills are introduced daily that are being reviewed to protect and promote credit unions. The activity of note for this week included:

Bills of Interest Introduced:

  • HB 115 by Rep. Billy Mitchell (D-Stone Mountain) is yet another foreclosure-related bill that seeks to allow a debtor the right to "cure" a foreclosure by making all past-due payments, late fees and charges up to five days prior the sale of the property. Sound familiar? This bill, which has been introduced over the past several sessions (and was introduced earlier this year as HB 31), will be monitored closely, as it is a vehicle for attempts to increase the foreclosure notice period and lengthen the time individuals can stay after a foreclosure is initiated.
  • SR 43 by Sen. John Albers (R-Roswell) seeks to institute a study committee to analyze and review all special tax exemptions. If this committee is approved it will be one that will require much time in the off session to monitor and protect credit union interests.
  • HB 90 by Rep. Wendell Willard (R-Sandy Springs) is the "annual code revision" bill that seeks to correct any errors or unnecessary cross-references in law (as new laws that are passed often create the need to tweak existing language). Some of the changes in the bill include several minor revisions to Title 7, which is the title of law that encompasses financial institutions. While the bill is substantial in length but typically innocuous in content, it requires a careful watch to prevent unintended changes of consequence to the industry.
  • Redemption of tax sales has been a recent topic of discussion with legislators and lobbyists, and will likely result in multiple bills. From a credit union perspective these conversations and any subsequent bills that are introduced are of interest so as to prevent any fees, fines, or other parties from creating a "super lien" status that is at the same level as a tax lien, and superseding the lien priority status of credit unions and other financial institutions. This week saw the introduction of HB 81 by Rep. Scot Turner (R-Holly Springs), which seeks to prevent these "super liens" from happening. However, it will need to be monitored closely in the process as it pertains to liens themselves, and bill language (and intent) can and does change quickly.

Hearings of Interest:

  • HB 57 by Rep. Mike Dudgeon (R-Johns Creek), which is a compromise bill between power companies and solar energy advocates, was heard in the House Energy, Utilities and Telecommunication Committee on Wednesday, January 28th. This bill seeks to provide a legal framework for the financing of small installations of solar power units; this issue is monitored to prevent any additional compliance burdens from inadvertently being added on to credit unions. And while the topic of adding additional lending regulations was discussed in the hearing, there were no changes to the bill (lending or otherwise) and it passed unanimously out of committee.

More bills and hearing activity are pending as of press time; please check Creating Influence for updates during the session. For more details you can also follow the activity at the statehouse on Twitter, and access the bills monitored on behalf of credit unions here.

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DataPushing Congress on Data Security (Issue 3 of 5)

A group of financial trade organizations has written to Congress with a set of principles to serve as a guide for potential data-security legislation. President Barack Obama spoke of the need for such legislation, and the House subcommittee on commerce, manufacturing and trade hosted a hearing on Jan. 27 examining what sound data-breach legislation should look like.

The letter reads: "Some industries – including the financial industry – are required by law to develop and maintain robust internal protections to combat and address criminal attacks, and are required to protect consumer financial information and notify consumers when a breach occurs within their systems that will put their customers at risk. The same cannot be said for other industries, like retailers, that routinely handle this same information and increasingly store it for their own purposes." 

The letter is signed by CUNA, the American Bankers Association, the Consumer Bankers Association, the Financial Services Roundtable, the Independent Community Bankers Association, the National Association of Federal Credit Unions and The Clearing House. The list of principles the organizations believe should serve as a guide when drafting data-breach legislation are:

  • Strong national data protection and consumer notification standards with effective enforcement provisions that are applicable to any party with access to important consumer financial information;
  • Credit unions and banks are already subject to robust data protection and notification standards. These Gramm-Leach-Bliley Act requirements must be recognized; 
  • Pre-emption of inconsistent state laws and regulations for strong federal data protection and notification standards;
  • In the event of a breach, the public should be informed where it occurred as soon as reasonably possible to allow consumers to protect themselves from fraud. Credit unions and banks should be able to inform their customers and members about the information regarding the breach, including the entity at which the breach occurred; and
  • Requiring the costs of data breaches to be borne by the entity that incurs the breach. Financial institutions are subject to significant federal requirements regarding protection of information and consumer notification, and they are also subject to federal oversight, examination and sanction authority. 
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Supreme Court Rejects Interchange Lawsuit (Issue 4 of 5)

Supreme CourtOn January 20th the Supreme Court rejected a request to hear a case brought by a group of retailers regarding debit card interchange fees – and this move is positive for credit unions. A cap on such fees was established by the Dodd-Frank Act, but retailers argued the cap is too high, and sued the Federal Reserve’s board of governors in an attempt to have the rule revisited. No further appeals on the case are possible. While merchants have argued that a lower cap would benefit consumers, there has been no evidence that it would cause prices to come down. The coalition filed an amicus brief in 2012 saying the cap is too low and does not allow debit-card issuers to cover their costs with a reasonable rate of return.

For those not familiar with the issue: An interchange fee occurs when a debit-card transaction takes place. The fee goes to the financial institution that issued the card, and it is used to pay for the cost of providing the card and the transaction services, including fraud protection. However, the Dodd-Frank Wall Street Reform and Consumer Protection Act called for the cap on the fees and required the Fed to implement it. Then in 2011, the Fed announced a cap at 21 cents per transaction for issuers with more than $10 billion in assets. After the initial lawsuit brought by National Association of Convenience Stores, a U.S. District Court struck down the cap in July 2013. That decision was overturned in March by a three-judge panel of the U.S. Circuit Court of Appeals for the D.C. Circuit.

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Tax refundNew Tactic by Competitor: Tax Refunds Via Wal-Mart (Issue 5 of 5)

On January 20th, The Washington Post highlighted one of the financial sector’s often "hidden" competitors, Wal-Mart, and its tax-season push to gain more customers for its financial services.

Wal-Mart is giving another option to the minority of taxpayers who might otherwise wait for a check to hit their mailbox: pick up the refund, in cash, at any Wal-Mart store. The move is the latest effort by Wal-Mart to target consumers who may not have a bank, who work mostly in cash, and for whom a tax refund is probably the biggest windfall they’ll see all year. "We know tax refunds can be one of the largest financial payouts of the year for many of our customers," Daniel Eckert, senior vice president of services for Wal-Mart U.S., said in a statement.

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