Nearly thirty Nebraska credit union professionals and volunteers joined five thousand credit union advocates from across the country in Washington D.C. in late February for the Credit Union National Association’s “Government Affairs Conference” known as the GAC. The GAC is the premier credit union event held during the year that culminates with Congressional Hill Visits. “The GAC is all things credit union” said Stan Fraser, President/CEO of Nebraska Energy FCU and NCUL Board Chairman. “Getting the most up to date information on elections, legislative issues, regulatory issues, credit union best practices and newest innovations in the credit union industry are found at the GAC” said Fraser.
The Nebraska Credit Union League (League) hosted several events for Nebraska’s attendees including a Welcome Reception, Hill Staff Reception, the all-important Hill Visits, and dinner with Congressman Brad Ashford (D-NE 2). Kansas Corporate Credit Union co-sponsored the Welcome Reception and the Federal Home Loan Bank of Topeka co-sponsored the Hill Staff Reception. The Hill Staff reception invites congressional staffers who serve Nebraska’s Congressmen and Senators on Capitol Hill to interact with our credit union professionals and volunteers. “Congressional staff members are the gatekeepers to our Congressmen and Senators and so this reception allows us to make sure they (staffers) understand what credit unions do for their boss’ constituents…credit union members” said Brandon Luetkenhaus, League Governmental Affairs Director.
Nebraska’s credit union advocates met face to face with each of Nebraska’s Congressmen and Senators and their key banking staff members. During those Hill Visits, advocates focused on four key areas including the importance of the credit union federal tax status, reducing regulatory burdens, the National Credit Union Administration’s (NCUA) proposed Field of Membership rule, and reforming merchant data security.
In late 2015, the Nebraska Bankers Association (NBA) commissioned a study to attack the federal tax benefits of Nebraska’s credit unions and the Farm Credit Services of America system. The study concluded and urged Congress to tax not-for-profit credit unions. During each visit, the advocates reiterated why credit unions are federally tax exempt and how credit union members and all consumers benefit from credit unions in the marketplace. They pointed out the absurdity of the NBA’s claim that credit unions are hurting Nebraska banks when those very banks hold 96% of the deposits in the state.
The advocates reminded lawmakers that Congress first provided the tax exemption in 1937 and have reiterated their support on several occasions ever since. “Congress provided our federal tax exemption because of our not-for-profit structure and our mission to promote thrift amongst our members” said Luetkenhaus.
Since 2008, credit unions have been inundated with new regulations coming from a multitude of federal agencies. Although credit unions were not the cause of the financial crisis that began in 2007-08, they have been lumped in to most of the regulations created by agencies including the NCUA and the Consumer Financial Protection Bureau (CFPB). When talking about the ambush of regulations that his credit union must tackle, Centris FCU President/CEO said, “Sixty percent of our staff members’ time is consumed with complying with rules and regulations. The majority of our day is spent on things that serve the government rather than things that serve our members”. The advocates urged Congress to pass S. 1484 introduced by Senator Shelby (R-AL) which includes multiple provisions to provide regulatory relief to credit unions. In addition to asking Congress to pass legislation, advocates also asked all three Nebraska Congressmen to co-sign a letter to the CFPB’s Director Richard Cordray urging him to utilize the CFPB’s authority to exempt credit unions from unnecessary and burdensome regulations created by the CFPB. Within days of the meetings, all three of Nebraska’s Congressmen signed onto the letter (Click here to read official letter). In total, 329 members of Congress signed on to the letter which was sent to CFPB Director Cordray on March 14th. CUNA placed an ad in the widely circulated Politico newspaper thanking those Members of Congress who co-signed the letter to the CFPB. See CUNA’s ad HERE.
NCUA Field of Membership:
In recent months, the NCUA proposed a rule to modernize field of membership for federally chartered credit unions. The proposal has, unsurprisingly, come under attack from the nation’s banks through thousands of comment letters opposing the proposed rule. Advocates urged the support of our Congressional delegation for the proposed rule. “It is important that the dual chartering system be strengthened and the proposed rule makes steps towards that end. The federal field of membership rule is outdated and needs to be modernized to keep up with many state acts that are much more modernized and attractive when it comes to field of membership” said Scott Sullivan, President/CEO of the League.
Merchant Data Breach:
The occurrences of merchant data breaches continues to be on the rise and with those breaches comes significant costs to credit unions including monetary and reputational costs. Nebraska’s credit union advocates urged the support of H.R. 2205 and S. 961, the Data Security Act of 2015 and thanked Congressman Fortenberry for his co-sponsorship of the House bill. They discussed the costs associated with the breaches and the reputational risk that is present when credit unions are prohibited from revealing where the breach occurred. “We have members that have had their accounts compromised because of a merchant data breach and yet they cannot be made aware of the source of the breach. This puts the reputation of the credit union at risk because the member may think that it is the credit union that caused the account to be compromised and the credit union cannot reveal the true source of the breach. “It’s true that when a large breach occurs such as the Home Depot or Target data breaches occur that most, if not all members, know where the breach occurred because they are covered well in the media but it’s the smaller breaches that pose the greatest reputational threat to credit unions” said Scott Sullivan of the League.
The League hosted a dinner with Congressman Brad Ashford and Nebraska’s credit union attendees. Congressman Ashford is in his first two year term representing District 2 (Omaha & Bellevue). He, along with Nebraska’s other two Congressmen, will run for re-election this coming November. The PAC of Nebraska’s credit unions has provided the maximum amount ($10,000) of financial support that a PAC can provide to a candidate during an election cycle. “Congressman Ashford has voiced his support of the credit union tax status, has co-sponsored several regulatory relief bills important to credit unions, and has urged the CFPB to use its exemption authority for credit unions” said Sullivan. During the GAC, Nebraska CULAC Trustee Jim Cada, a volunteer of LincOne FCU, raised a record $4,000 from Nebraska attendees for our credit union PAC.