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Cornerstone Briefing: 4 Hot Topics CU Leaders Can Take to Lawmakers
Tuesday, February 23, 2016 7:00 AM

Cornerstone Briefing: 4 Hot Topics CU Leaders Can Take to Lawmakers

Monday's Cornerstone Credit Union League Legislative Briefing for attendees focused on four hot topics: protecting the credit union tax status, regulatory relief, HR 3048 (CFPB exemption authority), and data security.

SVP of Advocacy Jim Phelps discussed each item's importance and impact, and outlined the "ask" for credit union leaders to take to their lawmakers during this week's legislative visits.

Protect the Tax Status

Phelps pointed out that the credit union structure and mission has justified the tax status for 100 years, and that credit unions do pay taxes. Removal of the current tax status would eliminate credit unions and reduce consumer choice, he said. The credit union tax status saves credit union members, and non-members, $10 billion each year.

The Ask:  Congress should retain the credit union tax status in comprehensive tax-reform legislation.

Regulatory Relief

More than 190 regulatory changes from at least 15 federal agencies, Phelps said. Credit unions are expending significant resources for training, updating computer systems, and explaining changes to members. The financial impact of regulations costs credit union members $7.2 billion, which is $1.1 billion in lost revenue. Phelps recommends credit union leaders share

Cornerstone Briefing: 4 Hot Topics CU Leaders Can Take to Lawmakers
stories about the specific impact of regulatory burdens on your credit union.

The Ask:  Lawmakers should support credit union regulatory relief bills and work with leadership to ensure their enactment.

HR 3048, CFPB Exemption Authority

Section 1022 of the Dodd Frank Act provides the CFPB exemption authority, Phelps told the audience. HR 3048 would require the CFPB to exempt credit unions and community banks under $10 billion in assets from all future rules, and it would shift the burden to the CFPB to demonstrate a need to impose the regulations.

The Ask: Lawmakers should cosponsor HR 3048, the Community Financial Institution Exemption Act by Rep. Roger Williams (R-TX).

Data Security

Retailers do not face the same data security standards that credit unions are subject to, Phelps said. Millions of consumers’ personal financial information has been compromised in breaches, and data breaches expose credit unions to significant costs and reputational risks. All entities involved in the payment system should share responsibility for protecting consumer data.

The Ask: Lawmakers should cosponsor S961/HR 2205, which holds merchants that accept payment cards to the same data security standards as the credit unions and banks that issue the cards.