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Donovan Talks National Trends at Cornerstone Leadership Conference
Friday, September 8, 2017 6:30 AM

DC state of play

Credit Union National Association's CUNA's Ryan Donovan yesterday updated the attendees at Cornerstone's 2017 Leadership Conference and Expo in San Antonio.

Donovan said CUNA's goal is to create a more favorable operating environment for credit unions to serve their members through the removal of regulatory barriers and expansion of credit union powers and opportunities.

He noted the current credit union trends versus the public policy trends. Credit union trends include very strong membership growth, high and increasing loan growth, vastly improved asset quality, high earnings, and continuing consolidation. At the same time, public policy trends reveal more of the same and worse hindrances than in the past. The post-crisis regulatory shock continues, Donovan said, along with an historic level of congressional gridlock, a change in the dynamics as a result of the election outcome, and he noted, the calendar is not our friend.

As a result of regulatory burden on credit unions in 2014, the industry saw $6.1 billion in regulatory costs and $1.1 billion in lost revenue, for a total financial impact of $7.2 billion.

There have been many successes in 2017, however, Donovan says. So far, some of those include preserving the tax status; the passage of the CHOICE Act in the House; defeat of the banker lawsuit challenging the MBL rule; delay of the prepaid rule until 2018; prevention of the overtime rule; defeated PACE loan legislation in Arkansas, Montana, and Oklahoma; extended the small business RFI comment period; staved off NCUA's proposal for 3-6 bps assessment; and now anticipating rebates from the merger of the Corporate Stabilization Fund, among other successes nationwide.

The new trends require changes in approach, Donovan says. CUNA encourages "360-degree advocacy," which means strong interdependence with state leagues, fierce advocacy on behalf of all credit unions, addressing public policy issues from all angles, and saturating policymakers with the credit union message.

While key credit union interests and concerns include the threat of the NCUA being placed under the appropriations umbrella, CDFI and CDRLF, and other regulatory riders, Congress's agenda for the remaining days of the fiscal year are quite different. Their legislative "must do" items include appropriations, disaster relief, raising the debt ceiling, and extending expiring programs, such as those for flood insurance, defense, and Children's Health Insurance Program. And Donovan reminds us that less than two weeks remain until the end of the fiscal year, which means the "calendar is not our friend."

Donovan says that while it's hard to see how a bill passes in the Senate that accomplishes all of credit unions' objectives, there are reasons to be optimistic that regulatory relief might get on the agenda. Among them, the process in the Senate seems to be legitimately bipartisan. Still, whatever gets on the agenda may ultimately have to pass House Financial Services Committee Chairman Jeb Hensarling's muster.

On tap for this fall, Donovan says are NCUA nominations, field-of-membership litigation, stabilization fund closure, and TCPA petition. He also anticipates CFPB Director Richard Cordray's resignation and small-dollar regulation.

Donovan encourages robust advocacy at credit unions, including a plan for engagement; an in-house CU advocate; attendance at GAC; Hike the Hill, or state advocacy days; participating in local community groups and getting involved in elections; meeting with legislators locally—inviting them into your credit unions; running Project Zip Code; and signing up for the Member Activation Program (MAP).