CU Leaders Have Productive Discussions with Lawmakers at GRR

California State Senator Bill Dodd (center) with credit union leaders in Sacramento during the California Credit Union League's lobby day at this year's Government Relations Rally (GRR).
California State Senator Bill Dodd (center) with credit union leaders in Sacramento during the California Credit Union League's lobby day at this year's Government Relations Rally (GRR).

Nearly 100 credit union leaders from across the state participated in this year’s California Government Relations Rally (GRR), which saw positive meetings and discussions with state legislators and regulatory officials as credit unions navigate the future.

“We’d like to thank those who came to advocate for making the trip to Sacramento this year,” said Robert Wilson, vice president of state government affairs for the California Credit Union League. “We could not do what we do without you.”

Click here for photos of both days!

Speakers and Successful Lobby Day
The first day started off with remarks from Chris Shultz, chief deputy commissioner of the California Department of Financial Protection and Innovation (DFPI), followed by a question-and-answer session.

Later that day, two political strategists addressed GRR attendees — one covering the ballot initiative process and the other covering redistricting and its impact on upcoming elections. That evening, a successful fundraiser was held for Sen. Anthony Portantino (D-Pasadena) at the SAFE CU Convention Center.

The next day, more than 70 face-to-face meetings took place between credit union leaders and state lawmakers (and/or their staff aides) in the new “swing space” at the state capitol building, which is where legislators and their staff work while the old capitol annex building is being rebuilt.

The California Community Reinvestment Act bill that credit unions successfully lobbied against has been amended into a Home Mortgage Disclosure Act (HMDA) data analysis bill, which the League has not taken an official position on just yet. The League’s advocacy team and Legislative Advocacy Committee are still reviewing this new language. Fortunately, the bill is a huge improvement from the former state CRA bill due to quick credit union advocacy over the past several weeks.

Credit unions and the League also supported two financial literacy bills in their meetings with state legislators. Those include Assembly Bill 2051 (directing the California Department of Education to administer a grant program to assist local educational entities in providing high quality financial literacy in schools); and Assembly Bill 2215 (creating a public-private partnership to best determine methods and solutions for instructing K-12 students in personal finance education).

California DFPI Meeting and Updates
Deputy Commissioner Shultz gave credit union leaders a high-level overview on what’s happening at the DFPI.

Credit union examinations:

  • Remote examinations posture will continue for the time being.
  • The DFPI updated the current CAMEL rating to integrate the “S” (Sensitivity to Market Risk) component. This coincides with the concurrent change to the CAMELS rating system adopted by the National Credit Union Administration (NCUA) that became effective for federal credit union examinations as of April 1.

Affordable housing and accessory dwelling units (ADUs):

  • State-chartered credit unions must have purchaser’s mortgage insurance (PMI) on junior liens that exceed 80 percent loan-to-value (LTV) ratio when the principal balance is greater than $50,000.
  • The DFPI is looking at options of either: 1) a blanket waiver; or 2) an amendment to the regulations. The League prefers amendments to the regulations (the latter option) as federal credit unions and state banks are not subject to the same requirements (the League and credit unions always encourage parity whenever possible).

Vacancies mentioned in two areas:

  • A DFPI Credit Union Advisory Committee member seat is currently vacant.
  • The DFPI’s deputy commissioner of credit union position is currently vacant.

League Monitoring 30 Bills at State Capitol
Before and after GRR, the League has been actively monitoring 30 bills at the state capitol, including Assembly Bill 1771 and Senate Bill 975.

The League opposed AB 1771 — and it is not moving forward! This bill would have imposed an additional 25 percent tax on capital gains from the sale or exchange of qualified assets. This is a big win for credit unions.

SB 975 is an economic coercion bill allowing for the complete cancellation of a debt with very low standards of evidence. This would include all secured debts, which makes reversal of the debt very complicated. The bill does not specify whether loan collateral needs to be returned if the debt is cancelled. This bill is far too overreaching, and the League fears it will have a negative impact on lending (and perhaps lead to abuse and/or collusion).

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