Situation Fluid in Sacramento and D.C. as CUs Await Next Moves

Sacramento capitol building

The situation remains fluid in Sacramento with the California Credit Union League engaging in major policy discussions to protect credit unions. The League is working tirelessly on Assembly Bill 1436 and will keep credit union leaders updated as this year’s complex legislative session winds down.

AB 1436 Context
Assembly Bill 1436 was introduced in the California State Assembly last week. After credit unions defeated AB 2501 more than a month ago, AB 1436 authors are now trying to pass very specific mortgage forbearance-related items that are nearly identical to the requirements defeated in Assembly Bill 2501. Also, the Department of Business Oversight (DBO) restructuring plan is being discussed.

As this bill seems destined to pass, the League and every credit union across the state has a window of opportunity to possibly secure amendments for the industry if proposed modifications are small and targeted. The League has been discussing with credit union CEOs the forbearance provisions within AB 1436, as well as how to protect credit union members. You can review the mortgage forbearance section within the 17-page AB 1436 as currently written. It starts at the bottom of page 9 (“Chapter 2: Mortgages”) and ends on page 14.

Please stay tuned for an update.

Congressional Leaders Continue Stimulus Package Negotiations
The speaker of the House, Senate minority leader, Treasury Department secretary, and the White House chief of staff continue to make headway on a framework for another national economic stimulus-relief package. Treasury Secretary Steven Mnuchin has suggested the goal is to have a vote by the end of next week.

While leaders are focused on the major piece, the California and Nevada Credit Union Leagues and the Credit Union National Association (CUNA) continue to be engaged on a title for “Banking and Financial Services.” Senate Banking Committee Chairman Mike Crapo (R-ID) released the Senate GOP proposal on the banking title.

Included in this proposal is an extension through Jan. 1, 2022, of the Trouble Debt Restructuring (TDR) language from The CARES Act; extension of the National Credit Union Administration’s (NCUA) borrowing authority for the Central Liquidity Facility (CLF); and other important extenders. This is another step in the right direction; however, it is far from a path to law.

Negotiations will continue as the Leagues and CUNA teams work in the background with Congress to address these concerns.

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