Advocacy Update

​Senators call for CFPB to stay effective date for 1071 rule; new Podcast on interchange available now; and US job market continues to cool. 

Congressional members are in the final week of their summer recess. Senators will return to work next Tuesday and House members will be back to work on Wednesday.
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Senators call on CFPB to stay 1071 rule effective date for all CUs.
Eight Senators wrote to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra to request it stay the effective date of its 1071 rule for all credit unions and FDIC insured banks. The rule would require credit unions to collect and report certain data on applications for credit, and CUNA has concerns about its impact on community-based financial institutions. The Senators noted “deep concerns about the potential adverse impacts” of the rule, and also noted the current legal challenge facing the CFPB at the U.S. Supreme Court.

“At your agency’s request, a recent ruling of the U.S. District Court has created a situation where only some lenders, including large systematically important lenders, will receive a temporary reprieve from working toward implementation of the CFPB’s Section 1071 small business data collection rule, while others including many community banks and all credit unions, must seek further relief from the judicial system,” the Senators wrote.

The U.S. District Court for the Southern District of Texas issued a preliminary injunction for the rule, but it only applies to American Bankers Association members. CUNA, the Cornerstone League, and Rally Credit Union have filed to join an emergency motion for preliminary injunction to include all credit unions. CUNA and Leagues support a resolution to nullify the 1071 rule via the Congressional Review Act.

Interchange income at risk PODCAST available now.
The Credit Card Competition Act threatens credit unions’ ability to give back to their communities. Pending interchange legislation would not only reduce interchange income, but it would also threaten consumer data security, privacy, and access to credit.

Check out the latest CUNA Podcast “Interchange at Risk, to learn more about the potential impact on credit unions, consumers, and small businesses, as Jason Stverak, CUNA’s deputy chief advocacy officer, explains the implications of Durbin 2.0, how the CUNA-League advocacy team is addressing this threat, and how credit union leaders can get involved. 

Job market continues to cool.
August employment additions are slightly higher than the economic forecast of 170,000 but support a continued and slow deceleration in the labor market when compared to the average monthly job gains over the prior 12 months of 271,000. 

This is good news for the Federal Reserve efforts in reducing inflation, as it signals that the labor market is cooling off. The new labor market statistics also reinforce the policy consensus and CUNA's economic forecast that there is a strong possibility that the Federal Reserve Bank will pause its aggressive hikes of the Fed Fund rate for the remainder of the year. However, there is still uncertainty on the time span the Federal Reserve will keep interest rates high, and this timeline will depend on the evolution of several metrics such as core inflation, which remains elevated for policy standards.

The unemployment rate rose to 3.8 percent in August, and the labor force participation rate climbed to 62.8 percent. Year-over-year wage growth fell to 4.3 percent, with average hourly earnings rising just 0.2 percent during the month. Results among private sector industries were mostly positive. Education and health saw the largest gains (+102,000), followed by leisure and hospitality (+40,000). The transportation and warehousing sector lost 34,000 jobs.

NCUA hosting free webinar on inclusion.  
The NCUA will host a free webinar September 28 at 1:00 p.m. (CT) to highlight ways credit unions can use technology to expand access to financial services. NCUA Director of Financial Technology and Access Charles Vice will discuss opportunities and challenges in adopting technology to promote greater inclusion. Credit unions can register online and submit questions in advance by emailing [email protected]. The webinar will be archived on the NCUA’s Learning Management System.

Please contact Jeff Olson or Amy Kleinschmit with any advocacy related questions or concerns.