Legislative Update with Kenley

Funding debates; NDAA amendment; CFPB oversight; and NCUA budget cuts.

By Kenley Lamberty, Director of Political Strategy and Engagement
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Legislative Update
The legislative focus this week continues to be on government funding and the potential shutdown. The House does not have votes scheduled, but the Senate returned yesterday, Monday September 29th, and is expected to take another vote on the "clean" CR.

Additionally, the National Defense Authorization Act (NDAA) still technically remains active on the Senate floor, and we could see amendment votes if an agreement to proceed is reached. Otherwise, the Senate may opt to move on to negotiations with the House without passage.

Dakota Credit Union Opposes NDAA Amendment That Threatens Liquidity
Dakota Credit Union members voiced strong opposition to a proposed amendment to the National Defense Authorization Act (NDAA) introduced by Sen. Rand Paul. The amendment would prohibit the Federal Reserve from paying interest on reserves—a move that could significantly impact the 12,000 credit unions currently holding interest.

Such a change could affect liquidity, free checking accounts, and the Fed’s ability to operate effectively in the free market. The amendment is unlikely to pass, lacking the 60-vote threshold and facing opposition from Senate Banking Committee Chairman Tim Scott.

America’s Credit Unions Urges CFPB to Exercise Appropriate Supervision of Nonbanks
In response to the Consumer Financial Protection Bureau (CFPB)’s proposed rule on the legal standard applicable to its supervisory designation proceedings, America’s Credit Unions submitted comments to share concern that the proposal improperly narrows Congress’s intent for the CFPB to supervise nonbanks that pose risks to consumers.

Adoption of the proposed standard of “high likelihood of significant harm to consumers” rather than the statutory language of “poses risks to consumers” would lead many nonbank entities to be outside the scope of regulatory supervision, placing consumers at risk and creating the potential for regulatory arbitrage that favors fintechs and other nonbanks while disadvantaging credit unions.

NCUA Proposes Significant Budget Reduction
The National Credit Union Administration (NCUA) released draft 2026–2027 budgets, with a 20.6% decrease proposed for 2026. DakCU along with America's Credit Unions have shared concerns with NCUA about their year-over-year budget increases, and this reduction is mostly due to reduced staff, employee travel, and contracted services.

We will continue to advocate for transparency and efficiency in the NCUA’s budget to ensure safety and soundness of the industry.

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For more information or to share your perspectives, feel free to contact me.