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The Advocate - Legislative Update
Friday, May 16, 2014 12:00 PM


Regulatory Relief in Sight

Members of Congress have recognized the value of credit unions, as well as the credit union difference. As a result, credit unions may soon see some regulatory relief. Last week, the House of Representatives passed two stand-alone bills for credit unions and a third bill that will benefit credit unions, while another bill works toward the House floor and an important housing reform bill gets off the ground in the Senate.

H.R. 3584. By a vote of 395-0, the House passed H.R. 3584 which would give privately insured credit unions additional opportunities to provide mortgage credit to their members by access to membership in the Federal Home Loan Bank system. The bill now goes to the Senate and stands a chance of passing before the end the year.

H.R. 3468. The House passed H.R. 3468 by a voice vote. This is the Credit Union Share Insurance Fund Parity Act, which would provide National Credit Union Share Insurance Fund (NCUSIF) coverage for trust accounts at credit unions (such as interest on Lawyer Trust Accounts (IOLTAS) and other similar accounts) offering parity in the insurance treatment to that of similar accounts offered by banks. This legislation is now pending in the Senate, and may be enacted before the end of the year.

H.R. 2672. The House passed H.R. 2672, which would grant credit unions and other lenders greater input into the CFPB's rural-area designations (which can affect the types of services credit unions may offer their members in those areas). This is one of the first bills to modify the Dodd-Frank Act which has passed the House with bipartisan support.

H.R. 3211. The House Financial Services Committee voted on and passed H.R. 3211, the Mortgage Choice Act. This bill amends the CFPB's final "Ability to Repay" rule and excludes from the definition of "points and fees" the compensation which is retained by a creditor or its affiliate as a result of its participation in an affiliated business arrangement as defined under RESPA. The next step for the bill will be consideration on the House floor.

S. 1217. The Senate Banking Committee voted this morning to approve its Housing Finance Reform and Taxpayer Protection Act of 2014 (S.1217). The bill is intended to redesign the nation's housing finance reform system to address problems that caused and resulted from the country's recent mortgage market and economic meltdown. The bill's summary says it is "designed to protect taxpayers from bearing the cost of a housing downturn; promote stable, liquid, and efficient mortgage markets for single-family and multifamily housing; ensure that affordable 30-year, fixed-rate mortgages continue to be available, and that affordability remains a key consideration; provide equal access for lenders of all sizes to the secondary market; and facilitate broad availability of mortgage credit for all eligible borrowers in all areas and for single-family and multifamily housing types."

RBC Push Sees Traction

In May, the Cornerstone Credit Union League and CUNA diligently sought the support of legislators by asking for their signatures on Reps. King and Meeks' letter to National Credit Union Administration Chair Debbie Matz. The letter requested that NCUA make revisions to the proposed risk-based capital rule. Cornerstone pursued each member of the Arkansas, Oklahoma, and Texas delegations, and including King and Meeks, the signatory campaign garnered 324 signatures from the House of Representatives.

The breakdown along political lines for signatories to the King-Meeks letter shook out at 173 Republicans and 151 Democrats, and 75% participation from the House overall. From Arkansas, 3 of 4 representatives signed, from Oklahoma 3 of 5 signed, and from Texas, 25 of 36. Those lawmakers are:

Arkansas Representatives
Rep. Tom Cotton
Rep. Tim Griffin
Rep. Steve Womack

Oklahoma Representatives
Rep. Tom Cole
Rep. James Lankford
Rep. Frank Lucas

Texas Representatives
Rep. Joe Barton
Rep. Kevin Brady
Rep. Michael Burgess
Rep. Joaquin Castro
Rep. Mike Conaway
Rep. Henry Cuellar
Rep. John Culberson
Rep. Bill Flores
Rep. Pete Gallego
Rep. Gene Green
Rep. Al Green
Rep. Ruben Hinojosa
Rep. Sheila Jackson Lee
Rep. Eddie Bernice Johnson
Rep. Sam Johnson
Rep. Kenny Marchant
Rep. Mike McCaul
Rep. Beto O'Rourke
Rep. Ted Poe
Rep. Pete Sessions
Rep. Lamar Smith
Rep. Steve Stockman
Rep. Marc Veasey
Rep. Filemon Vela
Rep. Randy Weber

Comment Effort Aided by Former Senator D'Amato

In our efforts to get positive action on risk-based capital, credit unions were fortunate to receive help from former Sen. Alfonse D'Amato (R-NY). Sen. D'Amato chaired the Senate Banking Committee during the HR 1151 battle and led the development of the changes to the Federal Credit Union Act, wrote to NCUA outlining how the agency would exceed its legal authority if it adopted the RBC proposal.

In his letter, D'Amato noted that the net worth standards for a credit union to be adequately or well capitalized are higher than those set for banks. He emphasized that because of this higher pure net worth requirement for credit unions, Congress quite deliberately "called for a different risk-based component in credit union PCA. Rather than the dual risk-based capital system in place for banks ... [Congress] instructed the NCUA to construct only a risk-based net worth floor, to take account of situations where the 6% requirement to be adequately capitalized was not sufficient." He concluded, "If we had intended there should also be a separate risk-based requirement to be well capitalized (in addition to the 7% net worth ratio), we would have said so."


Cornerstone's Ensweiler Comments to NCUA on RBC

On behalf of Cornerstone Credit Union League, CEO Dick Ensweiler wrote to Gerard Poliquin, Secretary of the Board for National Credit Union Administration, to outline his objections to the agency's risk-based capital proposal. Ensweiler addressed concerns for a number of key issues, including:

  • league support for the Congressional comment letter submitted by U.S. House Representatives King and Meeks; 
  • the opinion that NCUA has exceeded its authority by imposing a risk-based capital requirement for well capitalized credit unions higher than the requirement for adequately capitalized credit unions; 
  • dissatisfaction at the lack of justification to risk weights proposed, citing unsupported, inappropriate, and arbitrary risk weights that do not accurately reflect actual risk; 
  • opposition to NCUA's intent to make the credit union RBC measure more consistent with the measures used by banks, contrary to what Congress had intended; 
  • anticipation that the proposal would cause many credit unions to limit activities in business lending and residential mortgages, which directly affects credit union members;
  • opposition to the subjective determination of higher capital amounts because such power is overly broad and not justified, and is unreasonable that a credit union that plays by the rules and is in compliance could be subject to the will of an examiner;
  • opposition to expansion of the definition of "complex" credit union; 
  • opposition to increases in the regulatory burdens of all credit unions, even those under $50 million in assets, due to the proposal; and
  • opposition to the credit union compliance deadline of only 18 months, with a request for an extension. 

You can access this letter from the Compliance Comment Call pages of the Cornerstone website. Please keep in mind, you must log in using your Cornerstone ID and password to access this document.

If you have questions about this letter, please contact Suzanne Yashewski, SVP Regulatory Compliance Counsel, at or (512) 853-8516.

Thanks to Our Credit Union Partners in the RBC Campaign

In our effort to help CUNA reach its goal of 1,000 RBC letters to NCUA, our goal for Cornerstone credit unions is 122. To date, Cornerstone credit unions have sent 69 comment letters, and less than two weeks remain before the May 28 comment letter deadline. Please take a few minutes to submit yours.

We know credit union leaders and staff are busy with the important work of serving their members, and we greatly appreciate the time and effort that goes into fitting the crafting of a critically needed comment letter into your schedule. We push the issue for the benefit of all credit unions, and we know you respond in the same spirit. So we wanted to pause and formally acknowledge and thank those credit unions who have stepped up to tell NCUA how the risk-based capital proposal would impact their credit unions.

Credit Union



Alcoa Community FCU

Steve Brown


Arkansas Superior FCU

Dwayne Ashcraft


Cooperative Extension Service FCU

Kim Wiedower


Diamond Lakes FCU

Dee Edie


Electric Cooperatives FCU

Windy Campbell


River Valley Community FCU

Tammy Passafiume



Gina Williams


Allegiance CU

Lynette Leonard


El Reno RIL Credit Union

Kelly Waggoner


FAA Credit Union

Steve Rasmussen


FAA Credit Union



Oklahoma Central CU

Gina Wilson


Red Crown CU

Marsha Schmidt


Alamo FCU

John F. Kirk


America's CU

Joe Wasaff


Austin FCU

Phil Mitchell


Austin Telco FCU

Robert Hernandez


Big Spring Education Employees FCU

Linda Park


Bravos Valley Schools CU

Joseph E. Simmons


Capital Credit Union

David Meade


Complex Community FCU

Jason Berridge


Corpus Christi S.P. Credit Union

Karen Sims



Robert Sanger


Energy Capital CU

Randall Dixon


First Class American CU

Nancy Croix-Stroud


Firstmark CU

Leon Ewing


Fort Worth City CU

Ron Fox


Greater Texas FCU

Michael Miller


Highway District 21 FCU

Alicia Snell Sendejo


Hilco FCU

Ed Baskin


Houston Metropolitan FCU

Barbara Stevens


Houston Texas Fire Fighters FCU

Clinton Hartmann


Kingsville Community FCU

Armando A. Martinez


Lone Star CU

Jerry Clancy


Lonestar CU

Jerry Clancy


Lubbock Teachers FCU

Sherry Fisher


Mid-Tex FCU

Robert Hagood


National Western Life FCU

Martha Eanes


Navy Army Community CU

Carrie B. Rice


New Mount Zion Baptist Church CU

Iris R. Netters


Nueces County Employees CU

Veronica Mahzoon-Hagheghi


People's Trust FCU

Virginia Goodson


People's Trust FCU

Steve Branstetter



Christopher O'Connor


Refugio FCU

Tamara Moehr


Resource One CU

Phillip Crocker


Resource One CU

Doug Bedner


Resource One CU

Olivier Swinner


Rio Grande Valley Credit Union

Allyson Morrow


River City FCU

Kim Heinze


River City FCU

Michael Quintanilla


Sabine FCU

David Meaux


Sacred Heart CU

Laurie Janak


Select FCU

Belinda McDaniel


Southwest Airlines FCU

Chuck Rutan


Suntide CU

Bill Wade



Paula Grigsby



Kelly Mitchell


Texas Farm Bureau FCU

Linda Rogers


Texas People FCU

Carolyn Smithwick


Texas Trust CU

Pamela Stephens


Texas Workforce CU

Mary Dunagan


Texasgulf FCU

J Michael Sterry


Texhillco School Employees FCU

Mark Bigott


The People's FCU

Art Hornell


Unity One CU

Gary R. Williams


University FCU

Tony Budet



Lupita Llanes


WesTex Community CU

Devora Mitchell


Wichita Falls FCU

John Arnold


Again, there's still time to submit your letter before the May 28 deadline--but not much! Please write your letter today. We have provided helpful resources on the Cornerstone Comment Call page.

If you need assistance or have questions about the RBC proposal or writing comment letters, please contact Suzanne Yashewski, SVP Regulatory Compliance Counsel, at or (512) 853-8516.

Your Vote Counts

Your Vote CountsThe runoffs are coming! The runoffs are coming! And here's your reminder to GET OUT THE VOTE! Following are links to help you navigate your state agencies for important primary election information.

Early voting is happening right now in ARKANSAS, from May 13-19. This is the preferential primary and nonpartisan election. Official Election Day is May 20. For information about voting in Arkansas, please refer to the Arkansas Secretary of State website, election pages. And don't forget, Arkansans must show an approved photo ID when voting in person.

For information on upcoming elections in OKLAHOMA, please refer to the Oklahoma State Election Board.

Numerous runoff elections will take place around the state of TEXAS, beginning on May 19, including the race for lieutenant governor, attorney general, Texas Senate, Texas House, and US Congress. For more information on elections in Texas, please refer to your county voter registrar's website. And don't forget, Texans must show an approved photo ID when voting in person.


Political Engagement Highlights

The Arkansas Credit Union Association participated in all five of the non-consent towing interim study committee meetings that took place recently in the General Assembly. This is an opportunity for discussion, testimony, and question and answer, and as a result of these sessions, we anticipate proposed legislation in the regular 2015 session to address the non-consent towing issue.

It's a new election cycle! And Arkansas Credit Union Association is one of the sponsors of the Arkansas State Chamber of Commerce Candidates Forums and Business Lobbyist luncheons. These luncheons are an avenue for business leaders to meet and listen to the candidates for the Arkansas House, Senate, or Constitutional offices. Beginning at the end of the legislative session, once those who are running for office have filed, the luncheon meetings begin. Over a period of 15 weeks, one luncheon per week took place, and 24 first-time candidates addressed Arkansas business leaders.

Arkansas' advocacy team sent an election cycle information sheet to all Arkansas credit unions. These sheets provide important details about the candidates running for the May 20 primaries, as well as the nonpartisan judicial general election candidates. Arkansas Credit Union Association President Reta Kahley notes, "These sheets are a great resource for directing credit union leaders to the candidates' websites and for helping to differentiate between the candidates."

Arkansas advocacy is continuing to run the Legislative Roundtable breakfasts every morning at the state capitol. During the legislative session, these are very busy events, attracting legislators and business people alike. After the session ends, these breakfasts attract legislators who remain at the capitol working on interim committees and other legislative endeavors, and sometimes even the governor. No less than 15 people attend these breakfast meetings, and the fact that Arkansas Credit Union Association sponsors them ensures that credit unions remain at the forefront of lawmakers' minds.


Legislative Highlights

Several bills important to credit unions are still moving through the Oklahoma legislative process. One is a bill that addresses a long-standing conflict with the tow-truck industry regarding possessor liens, and another clarifies access to the small-claims process.

With two and a half weeks remaining in this session, lawmakers are moving slowly and very contentiously on budget negotiations, in part due to escalating tensions between the Republican-controlled House and the Republican governor. One of several other conflicts includes the issue of funding for repairs to the state Capitol; and proving that timing is everything, the following weekend, part of a ceiling collapsed on the desk of a House staffer.

Of particular significance to Oklahomans, last week the legislature overrode Governor Fallin's veto of a bill supported by the National Rifle Association. It is the first time in state history that a Republican legislature has overridden a veto from a Republican governor.


Interim Studies Could Impact Both State and Federal Charters

Though the Texas Legislature is not in session this year, the work continues. Appropriators have begun reviewing the budget in preparation for next session to address the state's spending needs through a series of hearings on various areas of the budget. The two studies outlined below could impact not only state-chartered credit unions, but federally chartered credit unions as well.

The House Investments and Financial Services Committee will hold a hearing on May 21 to review Texas home equity laws. The committee is charged with studying and making recommendations for ensuring Texas consumers have appropriate access to the equity in their homes and have adequate protections.

The committee will also analyze the costs and benefits of implementing an intrastate equity crowd-funding system in Texas by examining the programs other states have implemented. In determining feasibility, they will also consider the statutory changes or regulations that would be necessary to implement equity crowd funding.

The committee will also conduct legislative oversight and monitoring of the agencies and programs under the committee's jurisdiction and the implementation of relevant legislation passed by the 83rd Legislature. In conducting this oversight, the committee has been tasked with considering any reforms to state agencies to make them more responsive to Texas taxpayers and citizens; identifying issues regarding the agency or its governance that may be appropriate to investigate, improve, remedy, or eliminate; determining whether an agency is operating in a transparent and efficient manner; and identifying opportunities to streamline programs and services while maintaining the mission of the agency and its programs.

Business and Industry Committee to Hold Hearings on Existing Lien Laws

On May 27, 2014, the Texas House Business and Industry Committee will hold a hearing on existing lien laws in Texas to:

  • Examine laws concerning the enforcement of contract liens affecting real property. Identify improvements, if any, that will enhance certainty of title following sale, enhance ability to ensure that sales are conducted by qualified trustees, prevent unnecessary litigation, facilities loss mitigation between borrowers and sellers, and protect the interests of homeowners, lenders and trustees. 
  • Study the imposition of mechanics' liens on automobiles and its impact on mechanics, car owners and purchasers, and lenders. 
  • Review ad valorem tax lien lending after the implementation of SB 247 (83R) and the impact on homeowners, taxing authorities, mortgage lenders, and tax lien lenders. Review the procedures and powers of the Office of Consumer Credit Commissioner to ensure compliance with SB 247. 

This committee will also study the impact of SB 1024 (82R) on wage theft and law enforcement and regulatory agencies' responses to wage theft claims.

Alamo Town Hall Meeting with CFPB's Martinez

Alamo Town Hall with CFPB's Zixta MartinezOn Tuesday, May 6, San Antonio-area credit unions had an opportunity to meet directly with the Consumer Financial Protection Bureau's Associate Director of External Affairs, Zixta Martinez, for a special Alamo Chapter of Credit Unions Town Hall event. About 40 credit union professionals were in attendance at the offices of SACU in San Antonio, including representatives from Cornerstone Credit Union League. Special thanks are due to SACU Government Relations Officer Yvonne De La Rosa for organizing the meeting.

During discussions, Martinez commented on the importance of hearing from financial institutions under the $10-billion threshold because CFPB really does consider how the rules will affect them. Martinez apprised the group about a number of issues the CFPB is working on, including the following:

  • Overdraft Protection. The CFPB continues to study overdraft protection programs and have issued one report already, though, according to Martinez, they have no plans to propose new ODP rules in 2014-15.
  • Mortgage Rules. Martinez acknowledged the problem lenders face with the 3 percent limit on points and fees when making small mortgage loans and the fixed outside fees which the lender can't control; and she indicated that the issue would be reviewed going forward.
  • Impact of Comment Letters. Suzanne Yashewski, SVP Regulatory Compliance Counsel for Cornerstone, asked Martinez to discuss the importance of comment letters. Martinez stated that letters which make the most impact are from financial institution personnel detailing specific operational problems as a result of proposed rules. Mass standard comments make the least impact. 

Jeff Huffman, Vice President Government Relations for Cornerstone, advised Martinez that the entire process of reviewing proposals, commenting, and determining impact on each financial institution is one of the biggest complaints from credit unions. He requested once again that the CFPB use its exemption authority to exclude credit unions from the rules it drafts which address problems created by banks once considered too big to fail.

Feedback about this town hall meeting was that Ms. Martinez seemed to be very open and responsive to all questions, and that it was generally a productive meeting.


Looking for the latest on regulatory and legislative issues? Follow these links:

Pending Federal and State Regulatory Issues

Pending Federal Legislative Issues