Credit unions must intensely focus their attention during the opening months of the 115th Congress on regulatory reform or risk having their priorities lost in the mix of other issues, CUNA President/CEO Jim Nussle warned on Friday.
“This Congress is going to be off to the races,” Nussle, a former eight-term former Republican House member said, in a one-on-one interview with CU Times.
CUNA members will have eight or nine months to push regulatory priorities before Congress becomes occupied with budget and other issues, said Nussle, who served as chairman of the House Budget Committee and director of the White House Office of Management and Budget.
Those months will amount to “good hard legislative time.”
As a result, “We are laser-focused on regulatory burden” issues, he said.
Nussle said that CUNA recently embarked on a comprehensive review of its legislative and regulatory agenda and strategy. “We began to take a look at how we could engage members even better,” he said.
That review included surveys, focus groups, meeting with diverse segments of the credit union community—and more.
He said that CUNA wants to build upon what he sees as successes in the 2016 elections. “CUNA and the leagues [were] as engaged in this election as we ever have been,” he said, in the wide-ranging interview.
The result was that more than 300 CUNA-backed members of Congress were elected, Nussle said, adding that the 115th Congress will be credit union-friendly.
Early Opportunities
Nussle recently sent a letter to credit unions pleading for their help.
“With the election of a regulation-averse Congress and administration, we have a serious opportunity before us to peel away the excessive regulations that hamstring your credit union, and we’re writing you to tell you that we need your help,” the letter states.
The letter continued, “As a first step, CUNA and the Leagues have launched aggressive efforts to meet with new and returning members of Congress and President-elect Trump’s staff. And what we hear from them is incredibly promising. We assure you, this new political climate presents a great opportunity for credit unions.”
In the interview, Nussle emphasized the need for credit unions to contact individual members of Congress.
He said that often, political party congressional leaders have trouble working with each other since they must publicly posture on behalf of their parties.
“There are ways that rank-and-file members can work together,” Nussle said. “They can bridge the gap. I’ve seen it work.”
That’s where credit unions can help, Nussle said. “The league system has to reach to almost every single member,” he added.
Nussle said that legislation is far easier to pass in the House, where the Rules Committee sets the parameters on floor debate and can limit the number and substance of amendments.
That’s not the case in the Senate, which does not have a Rules Committee. Senate debate, in most cases, can only be limited by gaining 60 votes.
“It’s a completely different animal,” Nussle said.
CFPB
Much of CUNA’s attention will focus on the CFPB, Nussle said. House Financial Services Chairman Jeb Hensarling (R-Texas) this year introduced comprehensive legislation that would overhaul the CFPB—converting it into a five-member commission, making it subject to annual appropriations and prohibiting it from issuing final rules in several areas without additional examinations.
“I’m not anti-CFPB,” Nussle said. “It’s not altogether a negative.”
The problem with the agency, Nussle said, is that it too often has implemented a “one-size fits all” strategy in which credit unions are treated the same as large banks.
“The rule-making has been far too broad,” he said, adding that he believes granting a single director all power over the agency has been a mistake.
NCUA
Nussle said fewer legislative changes are needed at the NCUA, which he said has been listening to the credit union community far better than in the past.
Nonetheless, he said CUNA opposes any efforts to impose premium increases on credit unions and will push the continuing need to make changes to the examination process, particularly the consistency of examinations.
Nussle would not hazard a guess about future leadership at the NCUA.
“It’s hard to handicap any of those decisions,” he said.
It is expected that President-elect Trump will name a new chairman at the agency, since current chairman Rick Metsger is a Democrat.
Speculation has centered on current NCUA board member J. Mark McWatters. However, McWatters has been nominated for a position on the Export-Import Bank. But he was not confirmed by the Senate and that nomination dies as Congress leaves for the year.
CUNA’s board also has made a commitment to continue to seek charter enhancements for credit unions to give the institutions more opportunities to serve members.
Tax Reform
Congressional Republicans and President-elect Trump have said they want to tackle comprehensive tax reform.
That may mean that some members of Congress will want to take a fresh look at the credit union tax exemption.
“We are always prepared for exactly that, perhaps more today than ever before,” Nussle said. “We are preparing for battle.”
He added, “Whenever they open the [tax code], everything is on the chopping block.”
Banks, the Courts and Other Issues
Nussle said that CUNA has added court advocacy to its priorities. The Independent Community Bankers of America have filed suit challenging the NCUA’s new Member Business Lending Rules and the American Bankers Association has filed suit against the agency for its new Field of Membership regulations.
CUNA is aggressively supporting the NCUA’s defense of the rules, Nussle said.
And he said it is ironic that there have been times that CUNA and the ICBA have been on the same side in seeking regulatory relief for small financial institutions.
There are times when community banks are unable to agree with CUNA positions and against the positions of large banks.
“They can’t say that because they’re all banks,” Nussle said.
Nussle said that in additional to regulatory relief, CUNA’s board has identified defense against attacks by other financial institutions as a high priority.
He said the board also is committed to the issue of data security.
Various data security bills were introduced during the past two years, but none of those pieces of legislation were enacted.
