CUs Discuss Issues with Regulators; Prepare for Congressional Visits

National Credit Union Administration (NCUA) Board Chairman Mark McWatters discusses credit union issues during the California and Nevada Credit Union Leagues’ regulatory meeting at the 2019 Governmental Affairs Conference (GAC).
National Credit Union Administration (NCUA) Board Chairman Mark McWatters discusses credit union issues during the California and Nevada Credit Union Leagues’ regulatory meeting at the 2019 Governmental Affairs Conference (GAC).

California and Nevada attendees at this week’s 2019 Governmental Affairs Conference (GAC) kicked off the credit union industry’s largest federal advocacy event by attending an important legislative and regulatory briefing on Monday, as well as key meetings with regulators on Tuesday morning.

Both the briefing and discussions in Washington, D.C. with officials from the Consumer Financial Protection Bureau (CFPB) and the National Credit Union Administration (NCUA) were hosted by the California and Nevada Credit Union Leagues at the conference, which is held annually by the Credit Union National Association (CUNA). These mini-events held by the Leagues were an opportunity to have informal dialog with the regulators.

Some of the discussion topics with NCUA Board Chairman Mark McWatters included the Current Expected Credit Loss (CECL) accounting standard (by the Financial Accounting Standards Board—FASB), as well as the “day one” impact to regulatory capital and supplemental capital on credit unions. Also, the agency’s Risk-Based Capital (RBC) rule and its impact was also discussed.

A “good dialog” also took place with representatives from the CFPB, said Sharon Turley, vice president of regulatory advocacy for the Leagues. It included discussion of PACE financing regulations (Property Assessed Clean Energy) and the bureau’s efforts so far to gather the information needed to draft rules.

Preparing for Congressional Visits
California and Nevada leaders were also debriefed as they prepared for this week’s visits with members of Congress (happening Wednesday).

Data security remains a top concern, as the current patchwork of privacy and security regulations leaves credit unions vulnerable. Credit unions are encouraging legislators to work together to pass comprehensive data security legislation that includes every entity in the payments system to protect consumers’ data and stop the breaches.

Another important issue is “federal parity” as credit unions comply with regulations that are not designed for how they operate. Visits will include discussions on modernizing the Federal Credit Union Act and adjusting other regulations since a one-size-fits-all approach is not beneficial for credit unions. Members of Congress will be educated about tailoring regulations to irresponsible lenders while insulating credit unions and their members from the negative impact of overburdensome regulations.

As always, the credit union tax status is front and center. Legislators will be reminded that credit unions’ tax status remains a key issue and should be upheld. This tax status fits the movement’s not-for-profit structure and volunteer-driven model. Credit unions continue proving “why” they are tax exempt through beneficial products and services that put members’ needs first, focusing on low and middle-income households, and empowering consumers with the right financing options to pay their bills during challenging seasons.

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