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Why You Need Dual Membership: Advocacy and Compliance
Monday, December 28, 2015 6:55 AM

Two of the biggest reasons for credit unions to embrace dual membership with Cornerstone Credit Union League and Credit Union National Association are advocacy and compliance. Those two aspects of affiliation provide the most vital benefits when taken together, but risk detrimental consequences when credit unions choose affiliation with only one or the other.

Interdependence is a term used to describe how these two workhorses keep the credit union movement progressing into a future of minimized regulatory burdens instead of getting squashed under the wheels of the powerful bankers lobby. It's this interdependence that ensures credit union interests are strategically addressed at state and federal levels simultaneously, not separately.

Let's Look at Advocacy

While federal advocacy and compliance issues make for bigger headlines, state and local laws can sometimes have an even bigger impact on credit union operations. Cornerstone is represented in each state capitol by association offices, and each office is led by an association president who is responsible for lobbying on behalf of credit unions in their respective states. The offices include staff that support and review filed legislation and produce key research materials for use in legislative meetings. 

Cornerstone researchers can evaluate upwards of 10,000 state bills for their impact on credit unions. Cornerstone has a long history of experience in this arena, and many of our successes are defined not only by the bills passed for the benefit of credit unions, but also for the many unfavorable bills defeated or amended.  

A good example of Cornerstone’s positive impact at the state level occurred during this year’s Texas legislative session.  A bill was introduced that would have added requirements to the Estates Code on new account forms related to Payable on Death (POD) accounts.  As originally filed, all financial institutions were included in the bill, but Cornerstone’s team in Austin worked to add an exemption for both state and federal credit unions.  This action saved Texas credit unions from new regulatory burdens. 

Just some of the things your Cornerstone advocacy and compliance teams work on during legislative sessions include:

  • Conducting analyses of many thousands of bills;
  • Closely monitoring hundreds of bills for changes;
  • Meeting personally with nearly every member of each state legislature and hundreds of legislative staff;
  • Collaborating with government relations contacts at other trade associations on shared legislative issues of interest;
  • Amending or defeating bills that would result in a loss of revenue for credit unions and their members;
  • Amending or defeating bills to exempt credit unions from unfavorable changes and additional burdens;
  • Passage of legislation that protects credit unions and their accountholders or lienholders;
  • Defeating efforts to change state regulations and laws that benefit credit unions. 
  • Monitoring adverse bills that are defeated or amended but might resurface in the next legislative session.

View the most recent Cornerstone Legislative Summary

“The results achieved this year in the state legislatures and Congress illustrate the benefits of the Cornerstone/CUNA collaboration,” said Cornerstone Senior Vice President of Advocacy Jim Phelps. “We secured victories on priority issues such as regulatory relief, data security, and protecting lienholder interests. We advanced more credit union-supported legislation in Congress than we have in years. This was made possible by having a strong advocacy presence in the state capitols and by collaborating with CUNA’s team on our shared legislative interests.”

The Myths of Compliance

Cornerstone's compliance professionals run into two big credit union myths regularly. These myths can be especially dangerous when it comes to compliance. Here are the two biggest compliance myths:

Credit Union Myth #1:
We are a federally chartered credit union, so we don’t have to follow state laws.

Credit Union Myth #2:
We are a state-chartered credit union, so we don’t have to follow NCUA regulations.

Cornerstone Credit Union League Senior Vice President of Regulatory Compliance Suzanne Yashewski clarifies, "As a federal credit union, you do have to follow many state laws; and as a state-chartered credit union, you do have to follow many NCUA regulations."

We’ve prepared a handy “cheat sheet” for credit unions to use as a reference guide or as a springboard for learning more about the compliance rules that do apply to both state-chartered and federally chartered credit unions.

Don’t believe the myths! Arm yourself with the facts.

PDFCompliance: State vs. Federal CUs Cheat Sheet

Need We Say More?

The strength of the credit union movement lies in this very powerful and purposeful dynamic of interdependence between state and federal entities. A separate affiliation with one or the other could conceivably create such an imbalance that over time one might be weakened enough to collapse representation of the entire credit union system. New market forces and increasing expectations of CUNA membership demand even more direct accountability between credit unions and CUNA. We hope we have your support.