Legislative & Regulatory Update

​John Alexander advocacy highlights – including proposed debit interchange revisions, NCUA nominee Tanya Otsuka, and small business lending data collection rule. 

John Alexander

by John Alexander, Director of Legislative & Regulatory Affairs
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DakCU's Advocacy Endeavors: Unveiling Highlights
Halloween Festivities Await DakCU! As All Hallows' Eve approaches, the North Dakota Credit Union Association (DakCU) community is abuzz with excitement over a series of upcoming events and advocacy efforts that promise to be as thrilling as a haunted house! From eerie virtual town hall gatherings to face-to-face meetings with influential figures, let's take a peek at what lies ahead for DakCU members.

Virtual Town Hall: A Hub of Ghoulish Information
DakCU members convened at a virtual town hall meeting earlier this week via Zoom. During this virtual session, members received updates on legislative work in the Dakotas. In addition, attendees were brought up to speed on compliance matters, and an announcement was made regarding a new partnership with a compliance solution exclusively available to DakCU and its affiliates. If you missed the invitation, don't fret; you can still reach out to ensure your participation.

Coining Change: The Piggy Bank Boss Alters the Savings Game Federal Reserve Meeting
Next week on proposed revisions to the debit interchange fee cap; for small rural credit unions, these changes might have both positive and negative effects.

The positive side is that the decrease in the base component of the interchange fee cap (from 21 cents to 14.4 cents) could mean that they pay less to the big banks and card networks when people use their debit cards. This might save them some money.

However, the reduction in the ad valorem component (from 5 points to 4 points) might mean that they get slightly less money for each transaction based on the size of the transaction. It's a small reduction, but it could add up over time.

The increase in the fraud prevention adjustment (from 1 cent to 1.3 cents) could help credit unions if they invest in good fraud protection. They might get more money to cover these costs.

Overall, it's a bit of a mixed bag, and the specific impact on each credit union will depend on their size, the number of debit card transactions they handle, and their strategies for managing interchange fees. Small rural credit unions might want to review their financial strategies to adapt to these changes.

Now, let’s put all that in laymen’s terms.

Alright, so imagine you have a special piggy bank. The people who make the rules for banks, like the Piggy Bank Boss, have decided to change the rules for how much money you get when you put coins in your piggy bank.
Before, when you put a coin in, you got 21 cents. But now, they say you will only get 14.4 cents for each coin. That's less money for you!

They also have two other rules. One rule is about how you get some extra money based on the size of the coin. Before, it was 5 points, but now it's only 4 points for every coin.

The last rule is about protecting your piggy bank from thieves. Before, you got 1 cent for this, but now they will give you 1.3 cents. That's a bit more!

But here's the tricky part: they will change these rules every two years, and they won't ask people for their opinions. They will just decide by themselves.

They also have some special math formulas to figure out these rules. They use these formulas to calculate the new rules. They also released a report about how much money they made from these rules in 2021. So, in simple words, the Piggy Bank Boss is changing how much money you get when you save coins, and they have some fancy math to do it.

Advocacy in Action: Meetings with Eminent Figures
DakCU has been diligently involved in advocacy efforts, particularly in Washington, D.C. The Senate Banking Committee's hearing on October 19th featured testimony from President Biden’s nominee for the NCUA Board, Tanya Otsuka.

DakCU's Advocacy team actively engaged with the Senate Banking Committee, supplying thought-provoking questions to ensure the nominee's testimony was comprehensive.

“We congratulate Ms. Otsuka on her nomination to the NCUA Board,’ said CUNA President/CEO Jim Nussle. “CUNA, Leagues, and credit unions have plenty of work to accomplish in collaboration with NCUA, and we look forward to working with her if she is confirmed.”

On our agenda is the scheduling of staff meetings with influential figures like Congressman Armstrong (ND) as well as Senator Rounds (SD) and Senator Hoeven (ND), where we will continue to advocate on your behalf.

Senator Hoeven's Stand on CFPB Small Business Lending Data Collection Rule
Senator John Hoeven has taken a firm stance against the CFPB's Small Business Lending Data Collection Rule. This rule imposes burdensome data collection requirements on financial institutions, potentially risking the privacy of small business owners.

Senator Hoeven cosponsored the Congressional Review Act (CRA) Resolution of Disapproval (S.J.Res.32) to rescind the rule, which was successfully approved by a vote of 53 to 44.

“This overbroad rule would increase costs for borrowers, affecting the availability of credit for small business owners, while risking their privacy. Our resolution would put a stop to this overreach by the Biden administration,” said Hoeven.

Mike Johnson Elected as 56th Speaker of the House in Republican Nomination
In an unexpected twist, Representative Mike Johnson of Louisiana has secured the Republican nomination for the next House speaker, emerging victorious on the initial vote in the House of Representatives. Johnson's election to the role of the 56th speaker of the House brings an end to weeks of turbulent leadership disputes within the Republican party.

"We congratulate Rep. Johnson on his election to speaker, and as a credit union member and previous supporter of our legislation, we look forward to working with him on important credit union priorities," said CUNA President/CEO Jim Nussle.

The credit union league in Johnson’s own state also approves. "Representative Mike Johnson has consistently championed for credit unions, both nationally and in his home state of Louisiana," said Juan Fernandez, president/CEO of the Louisiana Credit Union League. "As a devoted and proud member of his Louisiana credit union for many years, he has remained steadfast in his commitment to advancing the credit union movement. We extend our congratulations to Speaker Johnson on his remarkable achievement and look forward to further enhancing our collaborative efforts."

The nomination of Mike Johnson followed the withdrawal of Tom Emmer from Minnesota, who exited the race after failing to garner the essential 217 votes needed for the speaker's position. Emmer's decision was spurred, in part, by vehement opposition from former President Donald Trump and staunch GOP lawmakers. Despite his relatively low rank in the GOP leadership team, Johnson's background as a constitutional law attorney and small business owner positioned him as a pragmatic choice for the pivotal role.

Roger Heacock GAC-HTH Scholarship: Supporting DakCU Members
DakCU is proud to offer the Roger Heacock GAC-HTH Scholarship. This scholarship is a tribute to Roger Heacock's legacy of servant leadership and commitment to credit union advocacy. It offers financial assistance to credit union professionals wishing to attend the CUNA Governmental Affairs Conference (GAC) or the DakCU Legislative/Regulatory Hike the Hill (HTH). The level of assistance varies each year and depends on the number of qualified applicants and available funds. The application deadline for this scholarship is December 1, 2023.

2024 Governmental Affairs Conference (GAC) Registration Open
Registration for the industry's most significant credit union advocacy event is officially open. The 2024 Governmental Affairs Conference (GAC) is scheduled to take place at the prestigious Walter E. Washington Convention Center from March 3rd to the 7th. This event is the epitome of credit union advocacy, where leaders and advocates come together to underscore the impact of legislative policies on credit unions and their 130 million members.

A notable addition this year is the "Small Credit Union Blueprints for Success" initiative, encouraging credit unions to share growth strategies. The best entries stand a chance to win full scholarships to the 2024 GAC, covering registration, airfare, and accommodations. If you're interested in the GAC, don't hesitate to visit our “one stop GAC shop” or contact our office for more information.

Closing Statements - Wishing You a Spooktacular Journey!
DakCU's advocacy endeavors and upcoming events serve as a lantern lighting the path to a future filled with support, collaboration, and exciting opportunities. Just like a thrilling Halloween night, DakCU is dedicated to championing its members' interests as they venture forth into the ever evolving (and sometimes scary) landscape of legislative matters.
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Feel free to contact me with any of your legislative or advocacy questions or concerns! 

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