CA/NV CREDIT UNIONS

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2020 Government Affairs Conference

Introduction (5 minutes)

Team leaders should introduce themselves, followed by the group. Constituents should identify themselves.

CUs in the Community and Tax Status (10 minutes)

115 million American consumers (13 million in CA and 400,000 in NV) rely on credit unions for their financial well-being.

Credit unions continue to advance our not-for-profit, collaborative mission, investing in the financial health of our communities, keeping assets local.

Today, we make up just 7.5 percent of the financial services marketplace.

Nationally, we provide $18.9 billion in direct and indirect benefits to the consumer, outweighing the estimated $1.9 billion price tag for the credit union tax status.

By contrast, in H.R. 1, banks benefit in CA by $1.2 billion annually. In NV, by $552 million.

While tax exempt from income, credit unions pay nearly $20 billion annually in local, state, and other federal taxes.

Credit unions also serve underserved markets and keep assets local as for-profit lending has shifted from Main Street to Wall Street.

Since 2004, credit union branches increased by more than 1,600; bank branches decrease by over 1,700.

30 credit unions have acquired bank assets to the tune of $4.7 billion.

When forced to merge, community bankers prefer to partner with credit unions, knowing jobs and assets are kept local.

By contrast 2,000 bank-on-bank mergers have created mega-banks with $1.7 trillion in assets and sent most jobs to Wall Street.

Credit unions also operate in underserved communities.

  • 8.7 percent of credit union branches are located in low-income areas versus 5.3 percent of banks.

  • 67.8 percent of credit union branches or locations are in “modest means” areas—middle and moderate-income levels.

  • Despite field-of-membership restrictions, credit unions serve higher percentages of African American households than banks—roughly 17.4 percent versus 12.8 percent (for-profit lenders).

  • Credit unions serve roughly 6.8 percent of the Hispanic/Latino Community and continue to work and expand into this area.

  • Nearly 50 percent of credit unions focus on serving low-income individuals.

  • Nearly 50 percent of credit unions are in Community Development Financial Institution investment areas.

  • OUR ASK OF CONGRESS:

  • Preserve the credit union tax status. Please speak with colleagues on the House Ways and Means Committee/Senate Finance Committee in support of your locally owned and controlled credit unions.

  • Modernizing Federal Credit Unions (7 minutes)

    The federal credit union charter has become outdated.

    There are two types of credit union charters: those recognized by state government; and federal, overseen by the National Credit Union Administration.

    The federal charter has become less competitive and is in need of basic updates.

    Our first priority is to allow FCUs to increase the maturity limit on non-mortgage loans past 15 years.

    State-charter credit unions are already doing these loans and continue to perform well for their members.

    H.R. 1661 (Reps. Zedlin and Gonzalez) will allow the NCUA to set the maturity term for this type of lending.

    A companion bill is being drafted in the Senate that may have a different approach; however, the result will be the same.

    Additional charter powers that credit unions are seeking, include:

  • Exempting business loans made to Veterans from the member business lending cap—H.R. 2305/S.2834.

  • Enhance flexibility to schedule board meetings (will be introduced shortly).

  • Permit Federal Credit Unions to establish their own fiscal year.

  • Permit electronic balloting for conversions from state-to-federal charters, and vice versa.
  • Help credit unions update our charter and strengthen the dual-chartering system.

    OUR ASK OF CONGRESS:

  • Please support modernizations to the Federal Credit Union Act. As legislation updating the Federal credit union charter is introduced, please be prepared to co-sponsor or vote “yes” on these bills.
  • Data Security and Privacy Security (7 minutes)

    Credit unions are required by the Gramm Leach Bliley Act (GLBA) to have data security standards over their member’s data. This is verified by prudential regulators during routine examination.

    This law has worked since 1999.

    GLBA does not pre-empt state laws, allowing the states to further define security standards and data breach notification laws.

    In 2018, California passed the California Consumer Privacy Act (CCPA), a comprehensive privacy regime that applies to businesses operating in CA with revenue above $25 million.

    CCPA contains narrow exemptions for data covered under GLBA.

    Congress needs to create a strong national data security law that preempts all state laws and provides uniformity across the states.

    We believe a national data law should:

  • Cover all businesses and entities that collect, use, share, process, house and transmit personal information or other sensitive data. No entity should be able to escape responsibility.

  • Give Americans the right to know, correct and delete personal information in databases held by others.

  • Create equal expectations and protections by unifying standards, similar to GLBA.

  • Allow for enforcement of violations for the loss or harm to consumers and businesses. State attorneys general and the Federal Trade Commission should have authority to enforce privacy laws. Banking regulators should retain enforcement authority over those they examine given the success of the GLBA.

  • State law should be preempted so that businesses only need to comply with a single standard.

  • We know federal preemption is a tall order. Credit unions want a strong and consistent national law.

    While credit unions are local lenders, our members move across state lines. We need consistency in a national law to ensure compliance across America.

    OUR ASK OF CONGRESS:

  • Credit unions have followed GLBA’s privacy and data security requirements for over 20 years. We agree there needs to be an update in this era of digital privacy. Our position is to support a very strong national data security law that brings all those that collect, use, share, process and house consumer information under one uniform standard.
  • CONTACT US

      Diana Dykstra, President/CEO
      dianad@ccul.org

      Bob Arnould, SVP Advocacy
      boba@ccul.org

      Jeremy Empol, VP Federal Government Affairs
      jeremye@ccul.org

      Robert D. Wilson, VP State Government Affairs
      robertw@ccul.org

      Emily Udell, Advocacy Specialist
      emilyu@ccul.org

      Sharon Turley, VP Regulatory Advocacy
      sharont@ccul.org

      Heather deNecochea, Manager Political Advocacy
      heatherd@ccul.org   

    Patti Neumaier, Executive Assistant, Advocacy
      pattin@ccul.org

    CONTACT US

      Diana Dykstra, President/CEO
      dianad@ccul.org

      Bob Arnould, SVP Advocacy
      boba@ccul.org

      Jeremy Empol, VP Federal Government Affairs
      jeremye@ccul.org

      Robert D. Wilson, VP State Government Affairs
      robertw@ccul.org

      Emily Udell, Advocacy Specialist
      emilyu@ccul.org

      Sharon Turley, VP Regulatory Advocacy
      sharont@ccul.org

      Heather deNecochea, Manager Political Advocacy
      heatherd@ccul.org   

    Patti Neumaier, Executive Assistant, Advocacy
      pattin@ccul.org