Rep. Hern advocates rolling back some Dodd-Frank provisions

U.S. Rep. Kevin Hern (OK-01) met with about 45 credit union leaders as part of the 2019 CUNA Governmental Affairs Conference in Washington, DC, yesterday. Oklahoma Central Credit Union President/CEO Gina Wilson moderated the meeting.

Hern is a freshman who serves on the Committee on Natural Resources, the Committee on Small Business, and the Committee on the Budget. He is cofounder of a community bank where he served for 17 years on the executive board.

"I've seen what Dodd-Frank has done to all financial institutions, but credit unions and community banks under all-out assault," Hern said. "We'd all like to see some regulations in the CFPB roll back significantly, and we need to continue to push for that."

Wilson questioned Hern about the continuous banker attacks regarding the credit union federal tax exemption. "Should the taxation issue come up, we'd like you to remember the credit union structure and the reason for our exemption," she said.

Hern said credit unions and banks need to work together. "We don't need to be talking about destroying one another."

Wilson reminded Hern that credit unions bear the losses for data breaches and the movement needs legislation that protects credit unions and consumers from breaches. Spending hundreds of thousands on card replacements for members whose personal identity and card information has been stolen takes away our ability to serve our members, Wilson said.

Referencing the retail merchant groups and lack of accountability, Hern said it's just a fact of life in Washington, DC, that changes are driven by those with the loudest voices.

"The National Retail Federation ran a very successful campaign because they had the loudest megaphone and the most money," Hern said. "That's how they won the battle, and that's what it takes. When you have two industries going at one another, it's about how loud you can be and how much money you have."

Oklahoma Central Credit Union CEO Gina Wilson interviews Rep. Kevin Hern before a group of about 45 Oklahoma credit union leaders.

About credit unions providing services to cannabis businesses, Hern said he's been watching the movement going for a while.

"Medical marijuana is already legal in 32 states," Hern said. "Eventually [usage] is going to be recreational. Lawmakers in DC are hands-off, and a lot of states are carving out exceptions and violating federal law. It's a big issue."

The problem is that many lawmakers simply aren't well-versed on some of the issues, Hern said. "Just because they're on a committee, doesn't mean they understand the issues, and for some, it's the first time they've heard about the issue."

Hern said he thinks our financial situation is dire in this country. Across the board, our inability to pay debt back is dire. People have the inability to pay for things they've charged, and the government is the same way.

Hern says the government projects $46 trillion in revenue next year, but spending will be three times that. "Social Security is in line for a big cut," Hern said. "Those getting Social Security will see a 21 percent cut when the system goes insolvent. The government needs to make some hard, painful decisions to turn things around and make them better."

About the credit union tax status, Hern said the only people talking about it on the Hill are the bankers—not legislators, and he hasn't had any bankers approach him about it. Among his colleagues, he's not hearing anything from them about changing the tax exemption status.

"As long as you keep doing what you're doing, credit unions should be fine," Hern said.