While the first session of the 113th Congress is winding down (the House has already adjourned for the year, and the Senate will complete its business for the year this week), a flurry of activity surrounds the news that Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI) have agreed to a budget deal.
The deal, which provides an outline to fund the government through the end of FY2015, passed the House last Thursday with strong bipartisan support and will be voted on by the Senate this week. Notably, this agreement presents no direct impact on credit unions. It does not include comprehensive tax reform nor tax reform instructions for the Ways and Means or the Finance committees, though it does include new revenue to be generated through various fee increases (not increases to Fannie Mae and Freddie Mac guarantee fees).
The agreement establishes a two-year budget and allows the work on FY 2015 appropriations to begin in earnest in January. Significantly, the absence of a funding crisis means the threat of fiscal cliffs or government shutdowns have been significantly curtailed, which may help the other committees get back to normal. The Debt Ceiling still expires on Feb. 7, but extraordinary measures should push this date to June, and that could speed things along for tax reform.
Yes, the House will continue to pursue tax reform in 2014. Senator Baucus of the Finance Committee shows no signs of slowing down in the release of his tax reform proposals. This doesn't mean Congress is any closer to an agreement on comprehensive tax reform, but we know that important decisions on issues like the credit union tax status are being made in these early stages. Therefore, our continued push to maintain the credit union tax exemption should keep us in a good position when Congress does loom closer to completing the process. Once again, we must keep our eye on the "Don't Tax" ball.
Cordray Meets with Texas CUs
Director Richard Cordray of the Consumer Financial Protection Bureau (CFPB) and several of his senior staff were in Dallas last Thursday, Dec. 12, to meet with a group of credit union leaders from around Texas. Discussion covered the upcoming qualified mortgage rules; the new remittance rules; the harmful impact on members from over-regulation; the perception that CFPB lacks appreciation for the credit union "difference" and the fact that credit unions did not contribute to the financial collapse; and concerns with what the CFPB may propose regarding overdraft regulations.
Cordray said he wanted to hear whatever concerns credit unions had about the CFPB, and noted several times that the comments he heard were a "fair concern." Nonetheless, he defended much of the action taken by the bureau by noting it was mandated by Congress pursuant to the Dodd-Frank legislation.
With regard to the upcoming qualified mortgage rules scheduled to take effect Jan. 10, Cordray said that in the early months examiners are not going to be looking for perfection, but rather a good faith effort by financial institutions. One credit union leader commented that while finding the good faith effort may be the CFPB's goal, the reality in the field when examiners visit a credit union may be different. Cordray responded that he'd discussed the issue with NCUA Chair Debbie Matz, who was in agreement with his approach; however, if credit unions had a different experience, he suggested they take the matter to their league which could intercede with CFPB on their behalf.
One of the credit union participants asked the director to consider not just asset size, but the unique not-for-profit structure of credit unions in the rule-making process. Cordray noted that the credit union structure makes sense; however, he did not think it was within CFPB's power to say that credit unions should be treated differently in the rule making, since CFPB was created to regulate markets as a whole, on an even-handed basis.
Cordray said, "There is much to admire in the credit union not-for-profit model." He added, "Credit unions were formed to be the original consumer protectors. CFPB has tried very carefully to make that distinction in their rules."
The most interesting development of the day occurred during discussion of the remittance rule, when Cordray asked for a show of hands by credit unions that had discontinued offering the service in response to the new rules. The vast majority of credit union leaders raised their hands. Then the director asked how many remittances, on average, they had been processing, and the number ranged from a few hundred to a thousand per year. He said he was not aware that the regulation had had such a dramatic impact. While he didn’t offer any changes, it was obvious he was quite taken aback by the response.
Overall, it was a very productive meeting in the sense that credit unions had the opportunity to directly express their concerns to the director of the CFPB. Whether it will lead to changes in current or proposed regulations, no one can say. But open and frank discussion with the top regulator is always a good thing which could lead to CFPB's greater understanding of the credit union difference.
Legislative Luncheon and Kick-Off
Arkansas credit unions, take note of the upcoming legislative luncheon at the Arkansas State Capitol on February 12, 2014. The event will be held on the first floor of the Capitol Hill Building from 11:30 a.m. – 1:00 p.m. This annual event kicks off our advocacy efforts at the Arkansas State Legislature. Invitations will be sent in January to our state legislators and our credit unions.
Small Claims Procedure
What's on tap in Oklahoma? The Oklahoma Governmental Affairs (GAC) Sub-Committee meets prior to each legislative session to identify any opportunities or challenges that could be addressed in the upcoming session, and they’ve pinpointed a problem with a small claims civil procedure in Title 12, Section 1751, “Suits Authorized Under Small Claims Procedure.”
Credit Unions have historically utilized the small claims court to resolve small delinquencies without involving counsel; however, the use of the word “assignee” in documents pertaining to indirect lending has inadvertently caused certain small claims judges to disallow the petition. The Oklahoma GAC has unified behind clarification of the law’s language to resolve the issue. Draft amendatory language was presented by our lobbyist, Nate Webb, and the committee approved the language. Representative Rand McDaniel, chair of the House Finance Committee, has agreed to sponsor the bill.
Let's CU: ROAR into Advocacy
What's in a name? If it's Advocacy: The Path to Political Engagement, the answer is a whole lot! Whether you're a political advocacy pro or a newbie, this spiral-bound quick-reference guide is a great go-to resource. The principles and practices of advocacy for credit unions are tucked inside—simple and straightforward, the way advocacy was meant to be.
Highlighted sections include:
The Path to Political Engagement
How Laws Are Made
Preparing to Meet Your Lawmaker
How to Conduct Legislative Meetings
Cultivating Strong Relationships
Grassroots Advocacy Tools
Writing to Lawmakers and Regulators
Supporting the PAC
The Language of Advocacy
Need to train staff in legislative or regulatory advocacy and grassroots efforts? This guidebook will help you do that.
The advocacy guidebook is available FREE right now to all CU: ROAR credit unions. If you're not already a CU: ROAR credit union, join now and get your free advocacy guidebook. Contact Advocacy VP Jim Phelps firstname.lastname@example.org or Political and Grassroots Director April Mobley at email@example.com.
Your Advocacy Team
Your Cornerstone Advocacy Team met for an end-of-the-year wrap-up and review. Front row, L to R: Barri Hamilton, Director of Compliance; Linda Cates, PAC Administrator; Reta Kahley, President, ACUA; Charlotte Spencer, Executive Admin Assistant. Back row, L to R: Tom Haider, President, TCUA; Nathan Behncke, Regulatory Compliance Advisor; Gary Jones, President, OCUA; April Mobley, Political & Grassroots Director; Jim Phelps, VP Advocacy; Gretchen Ziegler, PAC Executive Director; Jeff Huffman, VP Government Relations; Suzanne Yashewski, SVP Regulatory Compliance.
One of the biggest reasons credit unions join leagues is because of the league's ability to make political and regulatory inroads on their behalf. Enter your Advocacy team. But who makes up the Advocacy team, and what have they accomplished on behalf of Cornerstone League credit unions throughout the year?
Since this is our last Advocate of 2013, we wanted to give you a brief rundown of just some of our advocacy efforts over the last year. In addition to many unquantifiable achievements, your Advocacy team:
Fielded more than 3,000 phone calls to the InfoSight hotline.
In the 83rd Legislative Session, reviewed the text of 6,379 bills filed, tracked over 223 bills that could impact credit unions, and closely monitored over 77 bills in the final weeks as they wound their way through the legislative process.
Ensured that legislation passed which would increase the number of advisory directors on credit union board, and stopped several proposals for rules that would have been burdensome for credit unions.
Obtained 85 regulatory compliance comment letters from Cornerstone credit unions.
Continued expanding credit union membership in Cornerstone's successful grassroots program, CU: ROAR. Total now: 74 credit union members.
Consistently ranked as one of the top 3-4 leagues in the country for rallying massive responses to the national "Don't Tax" campaign, generating over 83,000 messages to the U.S. House and Senate (and still counting!).
Raised $465k for TCCUL PAC, plus $223k for CULAC, which is 105% of goal. Significantly, Cornerstone credit unions have contributed more money to CULAC than any other entity in its history!
Raised $3,340 for ARCUPAC—plus $20,140 for CULAC, which is 212% of goal!
Sponsored a golf tournament in Edmond, Oklahoma, on Oct. 28, and raised $9,954 for OCUPAC. Total raised in 2013 for OCUPAC: $49,878.
Since 2001, your league has filed 60+ TEC reports. In odd-numbered years, we file twice (January and July). In even-numbered electoral years, we file seven times, not including runoffs. In 2013, we filed two 500-page, error-free TEC reports.
Developed the first political advocacy guidebook specifically for Cornerstone credit unions.
Developed customized "Don't Tax" cards and banners for credit unions, expanding the grassroots effort to include credit union members. By giving them a quick and easy way to contact their lawmakers, our united voice was amplified on Capitol Hill, giving them even more good reasons to leave the federal tax exemption alone.
Published 18 Advocate newsletters and 16 special alerts or announcements devoted to grassroots, taxation, and PAC activities.
Uniting for Good at CUNA GAC
You may have heard, this year the CUNA Governmental Affairs Conference will present two international powerhouse speakers: former U.S. Secretary of State Madeleine Albright and former prime minister of Great Britain and Northern Ireland, Tony Blair. If you're not already set to attend this conference, which takes place February 23-27 in Washington, DC, you'll want to be sure you sign up. As the milieu for the credit union movement's biggest week of the year, this conference invites more than 4,000 credit union leaders around the country to converge on The Hill for networking and meetings with legislators.
In addition to the "Hike the Hill" events, your league has arranged a "Spirit of Washington" dinner cruise on the Potomac River for the Cornerstone delegation, Tuesday, Feb. 25. Registration is open now. Contact Gretchen Ziegler at (800) 442-5762, ext. 6484, or go to the Cornerstone website for more information.