This Week in CA and D.C.: Policies that Could Impact Credit Unions

From state bills and regulatory activity in California to congressional legislation and policymaking in Washington, D.C., credit union leaders witnessed a host of activities this week that may have implications for their members.

California: Overdraft, Bad Debt Deduction, and Other Efforts

• California’s Senate Bill 1075 — state-chartered credit union legislation regarding overdraft and non-sufficient funds fees — is being amended and was published today by the California State Senate. The amendments do the following: 1) reduce the grace period from five business days to three; 2) remove the three-fee-per-month limit; and 3) add a fee cap of $14 or what the Consumer Financial Protection Bureau’s (CFPB) forthcoming rule will be — whichever is lower. These amendments do not change the California Credit Union League’s opposition; however, it is the League’s belief that the Senate will view these as a step in the right direction and the bill will move off the Senate floor.
• The League has updated its ongoing Connect for the Cause on SB 1075. Here is the League’s Senate Floor Alert that was sent to all members of the California State Senate this morning.
• California Gov. Gavin Newsom will provide his updated state budget proposal soon. The League has been working to preserve the “bad debt deduction” for credit unions. However, given this year’s projected state budget deficit, it’s been an uphill battle. Earlier this year, the League joined 10 organizations in a letter to the governor opposing his proposal to eliminate this provision within the California’s revenue and tax code.
• California’s Assembly Bill 2062 — the League-sponsored state charter modernization bill to strengthen the dual-charter credit union system — passed and has moved to the state Senate.
• The California Personal Finance Initiative has qualified for the statewide November General Election ballot! This would guarantee high school students a personal finance course as a graduation requirement. This effort comes alongside California’s Assembly Bill 1871, which incorporates personal finance content into social sciences for school grades 7 – 12 (headed to the Senate Education Committee). Also, Assembly Bill 2927 requires high school students to take a one-semester personal finance course as a graduation requirement (headed to the Assembly Appropriations Committee).
• Next week, the League know the fate of all California bills currently residing on the suspense file in the state legislature.

CPPA, Reg II, CFPB Updates, and NCUA Data on Overdraft/NSF

• The California Privacy Protection Agency (CPPA) Board of Directors will hold its next meeting on May 10. Agenda items include potential updates to data broker registration regulations, as well as a variety of regulatory proposals.
• The California and Nevada Credit Union Leagues is analyzing first-quarter 2024 National Credit Union Administration (NCUA) call report data on overdraft and non-sufficient funds fee income. The Leagues will be comparing this data with the upcoming fee report from the California Department of Financial Protection and Innovation (DFPI).
• The NCUA’s monthly board meeting has moved from May 16 to May 22.
• The Leagues are submitting its comment letter to the Federal Reserve Board (FRB) on the FRB’s Regulation II Debit Card Interchange Proposal. The Leagues would like to thank credit unions that submitted letters! The comment period closes May 12.
• The Consumer Financial Protection Bureau (CFPB) highlighted credit card reward programs in a new report.
• The CFPB also hosted a joint hearing with the U.S. Transportation Department regarding airline and credit card reward programs. The panel comprised industry representatives, labor leaders, and consumer advocates, including a credit union from Virginia.

CCCA News and Senate Hearing on CFPB’s ‘Junk Fees’ Agenda

• U.S. Senator Roger Marshall (R-KS) tried to force consideration of the Credit Card Competition Act (interchange legislation) through a procedural vote related to the Federal Aviation Act this past week. Fortunately, the four senators from California and Nevada opposed this effort! This is due to credit union leaders’ efforts during prior Capitol Hill visits, as well as 19,000 messages sent to Congress. Each senator has received over 1,000 letters in opposition to the CCCA, and senators from California and Nevada defended the California and Nevada Credit Union Leagues’ position by opposing Marshall’s measure.
• The Senate Banking Committee in Congress held a hearing on the Consumer Financial Protection Bureau’s (CFPB) “junk fees” agenda. During the hearing, Senators Laphonza Butler (D-CA) and Catherine Cortez Masto (D-NV) did not ask questions about credit unions and fees — which the Leagues are celebrating as a success.
• As the Leagues continue to set the record straight on why consumers rely on overdraft protection services, unwarranted scrutiny of credit unions continues. The Leagues provided an important update this past week on the issue, while also spotlighting its Credit Union Overdraft Resources site.
• You can read more about this past week’s success in the U.S. Senate here.