Next Steps After Pelosi’s Announcement; Padilla Letter on CLF

Top: (left) House Speaker Nancy Pelosi (D-CA) with Leagues President and CEO Diana Dykstra; (bottom) Rep. Kevin McCarthy (R-CA) talking with local credit union leaders.
Top: (left) House Speaker Nancy Pelosi (D-CA) with Leagues President and CEO Diana Dykstra; (bottom) Rep. Kevin McCarthy (R-CA) talking with local credit union leaders.

This week, U.S. House of Representatives Speaker Nancy Pelosi (D-CA) announced she will not stand for the leadership post in the 118th Congress. Pelosi will remain in her position as the representative from her district, and she will allow the next generation of party leaders to emerge.

The California and Nevada Credit Union Leagues have had a long-lasting relationship with Pelosi.

“The Leagues appreciates Speaker Pelosi and her continual support of credit unions and the cooperative model,” said Diana Dykstra, president and CEO of the Leagues. “She has been a trusted voice to advance our charter bills, and at times she has been supportive of the importance that makes up the credit union difference.”

In 2019, Pelosi addressed a political event hosted by the Leagues and the Credit Union National Association (CUNA) on Capitol Hill, where she spent considerable time discussing the importance of credit unions as community lender of choice.

With this announcement, internal elections for various posts inside the House Democratic Caucus will begin in the next few weeks. With California’s large delegation of leaders, it’s likely at least one Californian will emerge on the new Democratic leadership team.

On the GOP side, Rep. Kevin McCarthy (R-CA) will lead the new Republican majority. His vote for speaker will commence when the 118th session begins in early January. The GOP Conference formally nominated McCarthy this week.

“He has an outstanding relationship with his local credit unions, is a proud member of multiple credit unions, and he regularly meets with the California League,” said Jeremy Empol, senior vice president of federal government affairs for the Leagues. “California will always remain a state in high leadership roles. Nevada, proportionally, will have a tremendous say in banking and financial services.”

Central Liquidity Facility & NCUA Borrowing Authority
With the U.S. mid-term elections mostly in the rearview mirror, Congress has returned to Washington, D.C. to begin wrapping up national priorities. For credit unions, a few items remain, including extending the borrowing authority of the National Credit Union Administration’s Central Liquidity Facility (CLF).

Under the initial COVID-19 pandemic response bill (the CARES Act of 2020), the CLF’s borrowing authority was extended to ensure the NCUA was never in a situation where liquidity would be constrained. As that package and its extension have since expired, the Leagues and CUNA are seeking (at minimum) a one-year extension. What is specifically being targeted is the member-agent authority, which allows corporate credit unions to act as an agent of the CLF.

Rep. Maxine Waters (D-CA), chair of the House Financial Services Committee, passed a similar bill (H.R. 3958) last year, which was included in the House-passed version of the National Defense Authorization Act (NDAA).

To ensure this piece is completed, the Leagues and CUNA have been working with Sens. Alex Padilla (D-CA) and Kevin Cramer (R-ND) on a letter to the appropriate committee chairs requesting inclusion in any end-of-the-year legislative package. The senators just sent out their joint letter this past week, addressed to chairs of our nation’s House of Representatives and Senate banking committees and specifically targeting member-agent authority.

This will help in the discussions. With NCUA Board Chair Todd Harper testifying before each banking committee this past week, the letter from Padilla and Cramer is perfectly timed.

Remaining priorities for credit unions currently also include increasing loan maturities for federal credit unions, modernizing board meeting requirements for federal credit unions, and expanding field-of-membership in banking deserts within low-income communities regardless of charter type. The Leagues are also playing defense against any harmful provision regarding credit card interchange fees.

The congressional session will likely conclude sometime in mid-to-late December.

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