Board Modernization, CDFI Cure, & State Lawmaker Meetings

Rep. Juan Vargas (D-Chula Vista, CA), author of the Credit Union Board Modernization Act.
Rep. Juan Vargas (D-Chula Vista, CA), author of the Credit Union Board Modernization Act.

On Thursday, the House of Representatives passed H.R. 6889, the Credit Union Board Modernization Act — a bill providing parity with state-chartered credit unions by allowing federally chartered credit unions to remove the monthly board meeting requirement and move to one per quarter (and no fewer than six per year).

The bill, authored by Reps. Juan Vargas (D-CA) and Anothny Gonzalez (R-OH), also exempts federally chartered de-novo credit unions in their first five years of operations, as well as federal credit unions with a low CAMELS score (Capital Adequacy / Asset Quality / Management / Earnings / Liquidity / Asset-Liability Management / Sensitivity to Market Risk). A qualifying credit union must have high marks on the “Management” portion of the score.

“The credit unions in California applaud Mr. Vargas’ leadership and recognize his efforts,” said Diana Dykstra, president and CEO of the California and Nevada Credit Union Leagues. “A lot of time and effort has gone into this very simple charter enhancement, and that is not something credit unions take lightly.”

The bill passed with high bipartisan support, even though a recorded vote was requested. During the debate, House Financial Services Committee Chairwoman Maxine Waters (D-CA) presented on behalf of Vargas. She specifically noted the work of the California and Nevada Credit Union Leagues and thanked all credit unions for their advocacy efforts to pass this commonsense bill.

H.R. 6889 will now move to the Senate, where a growing number of bipartisan senators have co-sponsored the companion bill (S. 4325). With 12 GOP senators on board, and multiple Democrats, this gives a strong indication that the remaining hurdle is Senate procedure since the bill has similar levels of bipartisan support.

During the Leagues’ Hike The Hill gathering in September, credit union executives advocated aggressively to bring this bill for a vote.

“We want to thank Congressman Vargas on his vigorous leadership in authoring and advocating on behalf of credit unions," said Leagues Senior Vice President of Federal Government Affairs Jeremy Empol. "We also want to thank California and Nevada credit union executives and board volunteers who have lobbied extensively for this bill to pass. We couldn't have accomplished this without them."

CDFIs Considered Certified Until Official Notification of Change
Certified Community Development Financial Institution (CDFI) credit unions with pending submissions or cure period requirements are considered certified until the CDFI Fund provides official notification of change or termination of status, the fund said in a statement this week.

This comes after the Leagues and the Credit Union National Association (CUNA) doubled-down their efforts toward CDFI-certification cure period efforts. Both organizations sent the House Financial Services Committee and Senate Banking Committee an aggressive letter requesting intervention with the CDFI Fund and the U.S. Treasury Department for credit unions facing the end of the CDFI-certification cure period, effective Sept. 30.

CDFI credit unions have reported significant challenges regarding the application process in recent months, and the CDFI Fund will pause accepting new applications for six months starting Oct. 1. For more information, read Leagues & CUNA Press Congressional Banking Committees.

State Legislator and Candidate Meetings
Within the last week, the California Credit Union League’s advocacy team and local credit union leaders have been busy meeting with three strong credit union allies: Assemblymember Chris Ward (Assembly District 78), Assemblymember Tasha Boerner Horvath (AD-77), and AD-22 candidate Juan Alanis.

The League would like to thank Mocse FCU for hosting the event with Sergeant Juan Alanis, and also thank Organized Labor CU and Valley Strong CU representatives for attending! Alanis is well-connected to the community members of AD-22; he has served in the Stanislaus County Sheriff's Department for the last 27 years.

Credit union leaders quickly found he has a strong understanding of the unique structure of credit unions and their mission to help improve local members’ financial health. This district is home to 118,189 credit union members and consists of portions of Merced and Stanislaus counties, including the cities of Newman, Turlock, Ceres, Modesto, Patterson, and Gustine.

In San Diego, the League’s advocacy team and local credit union leaders gathered at North Island CU to meet with Assemblymembers Chris Ward (AD-78) and Tasha Boerner Horvath (AD-76). The time spent proved to be very valuable as both sides discussed future financial literacy partnerships, how to better serve low-income communities and small businesses, concerns about rising interest rates, and access to affordable housing.

The League would like to thank the San Diego PAC for its support, North Island CU for hosting, and the following credit unions for their leadership and engagement: San Diego County CU, California Coast CU, Financial Partners CU, SchoolsFirst FCU, and California CU!

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