CUs Win Victory on Capitol Hill; Press Forward on Other Fronts

Rep. Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee
Rep. Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee

The bipartisan spending package bill on Capitol Hill is now headed to President Joe Biden’s desk for signature and includes the Credit Union Governance Modernization Act, an important piece of legislation addressing member expulsions.

The California and Nevada Credit Union Leagues, the Credit Union National Association (CUNA) and industry leaders across the nation believe Americans should have access to safe and reliable financial services, which means federal credit unions must have a streamlined process for removing dangerous members from a credit union. As the current law is outdated and ineffective, H.R. 2311 and S. 1767 (the bill) will keep credit union members and employees safe by creating a framework for federal credit unions to swiftly remove a member for cause.

Additionally, the massive omnibus budget package — passed by the House of Representatives and the Senate over the past couple of days — extends funding of the federal government from March 11 to Sept. 30.

Additional CU Items in Spending Package
The spending package also includes these additional CUNA-League supported items:

  • Reporting that supports the National Credit Union Administration’s (NCUA) policy of prioritizing access to Community Development Revolving Loan Fund (CDRLF) grants by minority depository institutions and credit unions with less than $100 million in assets. The NCUA would ensure grant writers shall be an eligible expense for technical assistance grants to small credit unions provided under the CDRLF program. Last year the Leagues worked with Rep. Norma Torres (D-CA), a member of the Financial Services and General Government Appropriations Committee, to ensure small credit unions are able to use these funds.
  • $1.545 million for the NCUA’s CDRLF.
  • $295 million for the U.S. Treasury Department’s Community Development Financial Institutions (CDFI) Fund, which is $25 million more than the fiscal year 2021.
  • $18.5 million for the U.S Agency for International Development’s Cooperative Development Program.
  • Legislation providing replacement interest rates for loans, securities, and other instruments relying on LIBOR.
  • Legislation requiring a wide range of companies responsible for U.S. critical infrastructure, including depository institutions, to report cybersecurity incidents to the government (the Cybersecurity and Infrastructure Security Agency).
  • Reporting that encourages NCUA to identify census tracts with large shares of unbanked individuals for exploring strategies to increase access to credit unions in these communities.

Bill Introduced to Expand Financial Access
Rep. Maxine Waters (D-CA), chairwoman of the House Financial Services Committee, recently introduced H.R. 7003 (the Expanding Financial Access to Underserved Communities Act). Credit union leaders who participated in CUNA’s Governmental Affairs Conference (GAC) know this was the top priority.

The bill — introduced on the heels of GAC — is scheduled to be marked-up (amended and passed) in committee next week on March 16. It is the first significant overhaul of the Federal Credit Union Act since 1998 and would make several updates to credit union field-of-membership and business lending requirements, including addressing the ability of credit unions to serve underserved and marginalized communities.

“There is much work to be done. Credit unions in California and Nevada should please stay tuned for a message from ‘Connect for the Cause’,” said Jeremy Empol, vice president of federal government affairs for the Leagues. “To have Chairwoman Waters introduce the bill speaks to credit unions’ continued advocacy efforts.”

The bill would:

  • Allow all federal credit unions to add underserved areas to their field of membership.
  • Exempt business loans made by credit unions in underserved areas from the credit union member business lending cap.
  • Expand the definition of an underserved area to include any area more than 10 miles from the nearest branch of a financial institution.

“We continue to be thrilled to work alongside Chairwoman Waters on advancing this critical piece of legislation,” said Diana Dykstra, president and CEO of the Leagues. “Credit unions alone cannot solve the banking desert issue; however, credit unions cannot contribute to the solution if outdated field-of-membership restrictions remain a barrier.”

Dykstra said the Leagues’ team has been working on this concept with Waters for over a year to amass a winning coalition and work the legislative process the right way. “We applaud Chairwoman Waters’ efforts and those willing to join us in resolving this issue in order to advance America's communities,” she added.

Pin It