Advocacy Update

​Dakota lawmakers receive credit union perspective on interchange and other issues of concern at two conferences; lawsuit filed for injunction on CFPB 1071 rule. 

The U.S. Senate and House of Representatives are in recess throughout August. The Senate resumes legislative activity the week of September 4, and the House returns the week of September 11.
 
State lawmakers from the Dakotas connect with credit unions at conferences.
Credit union leaders tackled issues circulating in state legislatures across the country at two legislative conferences during the past two weeks. CUNA, leagues, and credit unions took part in the American Legislative Exchange Council (ALEC) in Orlando and the National Conference of State Legislatures (NCSL) in Indianapolis.
 
State lawmakers deliberated on hot button topics including environmental, social, and governance (ESG) and state economic reforms. These topics and policies often turn into bills during the states’ legislative sessions, making it an opportunity for both state leagues and CUNA to assess concerns. At ALEC, one of the key policies voted on this year was a resolution opposing the adoption and development of a central bank digital currency (CBDC). It resolves that state agencies will not accept or require central bank digital currency payments.

At NCSL, CUNA Chief Political Officer Richard Gose teamed up with Paul Russinoff of VISA to give an Interchange Learning Hub presentation to lawmakers, the Indiana Credit Union League co-hosted a credit union-focused coffee lounge that brought in more visitors to the booth, and credit union messaging was displayed throughout Indianapolis. Credit unions were also featured on the Wi-Fi log-in, NCSL app, a banner wrapping a sky bridge to the convention center, sponsorship signage around the venue, and a moving “billboard truck.” Nearly 40 state lawmakers from North Dakota and South Dakota took part in these meetings.

Next step for credit unions in CFPB Section 1071 Rule Injunction.
In an effort to add credit unions to a court decision that stops the implementation of the Consumer Financial Protection Bureau's (CFPB) section 1071 rule – CUNA, Cornerstone League, and Rally Credit Union filed to join an Emergency Motion for Preliminary Injunction in U.S. District Court for the Southern District of Texas on August 16.

The court granted the credit union motion to intervene on August 14. CUNA, Cornerstone and Rally pursued legal action after the court issued a preliminary injunction for the rule, but only applied it to American Bankers Association and Texas Bankers Association members and Rio Bank. The end goal is to obtain parity for credit unions. 
 
“Credit unions nationwide deserve the same relief granted to banks, especially since the CFPB itself noted in the final rule that smaller financial institutions will face difficulties complying with the rule in a timely manner,” said CUNA President/CEO Jim Nussle. 

The 1071 rule (finalized in March) requires credit unions to collect and report certain data on applications for credit for women-owned, minority-owned, and small businesses. It is scheduled to take effect on August 29. 
 
Before taking legal action, CUNA wrote letter together with NAFCU urging the CFPB to voluntarily delay implementation of 1071 for all covered lenders. The letter outlined how an uneven implementation of the rule is in violation of the purpose of both the rulemaking and the Bureau itself. 

Credit unions have consistently voiced concerns with the overly broad scope of the rule, its burdensome data collection, and significant potential for increased costs in small business borrowing. Cornerstone, Rally and CUNA each detailed the substantial cost and impact of the 1071 rule in support of the filing. 
 
Please contact Jeff Olson or Amy Kleinschmit with any advocacy questions or concerns.