Welch, Durbin, Marshall, and Vance introduce bipartisan Credit Card Competition Act of 2023 Posted by AVCU on 10:36 AM

 Bill would enhance competition and choice in the credit card network market currently dominated by the Visa-Mastercard duopoly

VermontBiz Senator Peter Welch (D-VT), Senate Majority Whip Dick Durbin (D-IL), and Senators Roger Marshall, M.D. (R-KS), and J.D. Vance (R-OH) today introduced the bipartisan, bicameral Credit Card Competition Act of 2023, legislation that would enhance competition and choice in the credit card network market which is currently dominated by the Visa-Mastercard duopoly.  Building on debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that large credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.  Companion legislation was introduced in the House by Representatives Lance Gooden (R-TX-05) and Zoe Lofgren (D-CA-18).  

“Interchange fees put a brutal strain on our small businesses, but because of the Visa-Mastercard duopoly in the credit card network market, Main Street businesses have no choice but to pay these crushing fees or risk going under,” said Welch.  “The Credit Card Competition Act will restore choice and competition in the credit card network market, helping to bring down costs for small businesses and making it easier for these essential businesses to thrive.” 

“Credit card swipe fees inflate the prices that consumers pay for everyday purchases like groceries and gas.  It’s time to inject real competition into the credit card network market, which is dominated by the Visa-Mastercard duopoly,” said Durbin.  “This legislation, which builds upon pro-competition reforms Congress enacted in 2010, would give small businesses a meaningful choice when it comes to card networks, and it would enable innovators to gain a foothold in the credit card market.  Bringing real competition to credit card networks will help reduce swipe fees and hold down costs for Main Street merchants and their customers.”   

“When it comes to Main Street vs. Wall Street, I’ll stand with Main Street businesses, who are the backbone of our economy, every single time,” said Marshall.  “At a time of economic uncertainty and skyrocketing inflation, these credit card companies are increasing their hidden swipe fees and price gouging small businesses and consumers.  Our legislation would rein in the big banks and the credit card industry, drive down costs for convenience stores, gas stations, and other small businesses, and ultimately pass those savings down to consumers.  This legislation is the right thing to do, and I am proud to reintroduce it with bicameral and bipartisan support.” 

“Due to a lack of competition, credit card companies have been able to exponentially increase hidden processing fees over the last decade.  These fees are most retailers’ highest business expense after labor and rent.  By requiring more than one network option on credit cards, the Credit Card Competition Act would foster competition and transparency in the credit card market so that card networks would have to compete for business on fees and terms – just as we compete for our customers’ business,” Leslie G. Sarasin, President and CEO, FMI – The Food Industry Association. 

There are currently four U.S. credit card networks: Visa, Mastercard, American Express, and Discover.  Visa and Mastercard are known as “four-party” networks; they act as agents for thousands of card-issuing banks and mandate the fees and terms that the banks receive from merchants for each transaction.  Merchants have limited leverage to negotiate fee rates and terms in four-party network systems, because they cannot risk losing access to the consumers served by Visa’s and Mastercard’s member banks.   

The market power and network structure of the Visa-Mastercard duopoly has enabled them to impose fees on U.S. merchants that are among the world’s highest, charging a total of $93 billion in U.S. merchant credit card fees in 2022.   These fees include interchange or swipe fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for these fees in the price of the goods and services they buy. 

Under the Credit Card Competition Act, the Federal Reserve would issue regulations, to ensure that banks in four-party card systems that have assets of over $100 billion cannot restrict the number of networks on which an electronic credit transaction may be processed to less than two unaffiliated networks, at least one of which must be outside of the top two largest networks.  This would inject real competition into the credit card market—opening the door for new market entrants such as current debit-only networks, encouraging innovation and enhanced security, creating backup options if a network crashes, and exerting competitive constraints on Visa and Mastercard’s fee rates. 

The Credit Card Competition Act is supported by organizations including the American Beverage Licensees, Armed Forces Marketing Council, Energy Marketers of America, FMI, Hispanic Leadership Fund, International Franchise Association, National Association of College Stores, National Association of Convenience Stores, National Association of Theater Owners, National Grocers Association, National Restaurant Association, National Retail Federation, National Wildlife Refuge Association, NATSO, NFIB, Retail Industry Leaders Association, SIGMA, U.S. PIRG, and over 200 state and regional business associations.  

**Recently re-introduced legislation would change the current credit card interchange system, making our current payments system less secure and hurting consumers. Tell your lawmakers to oppose changes to the current interchange system. Send a Message to Your Lawmaker here

A one-pager of the bill can be found here.   

Financial inclusion bill could reignite credit union-bank conflict Posted by AVCU on 10:01 AM

 The trend of credit unions buying banks has grabbed a lot of attention in recent years, but two other key issues have raised tensions between the two industries. 

Bankers have long opposed attempts by credit unions to expand their field of membership and  their business lending capabilities, but proposed legislation would open the door to both. The bill, H.R. 7003, the Expanding Financial Access for Underserved Communities Act, was approved last week by the House Committee on Financial Services by a 27-22 vote.

Introduced by the committee’s chair, Maxine Waters, D-Calif., the bill would allow all federal credit unions to apply to the National Credit Union Administration to expand their field of membership to include underserved communities, including those without a branch within 10 miles.

It would also exempt loans made by credit unions to businesses in those areas from the credit union member business lending cap. Under current law, credit unions are restricted from lending more than 12.25% of total assets to member businesses.

According to the Credit Union National Association, the bill’s member business lending exemption would apply to 2,207 federally insured credit unions that are not already exempt due other designations. 

CUNA also points out that there are no provisions in the bill restricting banks from opening operations in those underserved areas.

Still, the bankers are not amused.

In a letter to the House Financial Services Committee, the American Bankers Association said the legislation will not deliver on the “purported” objective of improving banking access to underserved communities but instead expand taxpayer subsidies of business lending.

According to the NCUA, commercial loans made by credit unions increased $17.3 billion, or 18.4%, to $111.7 billion in the fourth quarter of 2021 from a year earlier.

“What H.R. 7003 seems to provide is the ability for credit unions to expand out-of-market, which contradicts the credit union purpose of serving well-defined local communities and small groups of consumers of modest means,” the letter states. “The legislation also creates a major new loophole in the credit union business lending cap, long one of the most controversial issues in financial services. Bankers remain staunchly opposed to efforts to gut this limitation.”

But credit unions see the proposal primarily as a way to fill a gaping void.

The proposed changes are essential to increasing access to “safe, fair and affordable” financial services in rural communities, communities of color and other underserved places, said Todd Harper, chairman of the NCUA, in a press release.

“They would also advance financial inclusion within our nation’s financial system,” he said.

CUNA said the bill would give communities, small businesses and individuals who have lost access to affordable financial services — or perhaps have never had them — easier access to federal credit unions.

According to CUNA research, more than 750 census tracts in the U.S. are financial deserts, and a net 7,800+ bank branches closed between January 2005 and March 2021. During the same period, more than 1,400 net credit union branches opened.

But the business lending component is the key to the legislation, said Patrick Keefe, a credit union industry observer, former industry advocate and editor of the Regulatory Report.

Any relief from the 12.25% cap would be a big win for credit unions, he said.

“That’s potentially a big shift for credit unions, who are looking for new revenue sources whenever possible,” he said. “The exemption means they could start making more MBLs without constriction.”

Jason Stverak, CUNA’s deputy chief advocacy officer for federal government affairs, said the trade group is working with lawmakers on both sides of the aisle to build consensus around the legislation. 

“Whether the policy advances on its own or along with other legislation is up to House lawmakers, but we’re optimistic we’ll see movement this Congress,” Stverak said.

But according to Keefe, the outlook for the legislation is "challenging, to say the least,” he said. The bill faces a big uphill climb and will likely have to be brought up again in the next Congress.

He pointed to CUNA’s own letter to the House committee members in which CUNA said the only known opposition to the legislation comes from the banking industry, “and their opposition to this legislation reveals their true colors: first, they abandon underserved communities and then they try to keep credit unions out,” the letter states.

“Yeah, that’s all: just opposition from the banking industry. No big deal,” Keefe joked. “Except, it is. Banks clearly see this as an expansion of credit union powers — providing more services to people who aren’t now eligible for membership — and credit union commercial lending, which banks are out to impede, vigorously.”

It will take a pretty big push by the credit unions to get the legislation enacted, according to Keefe, and he is not convinced that most credit unions really care about more business lending authority. “Even though they probably should,” he said.

What could be in store for banks after Biden climate change order Posted by AVCU on 4:48 PM

 Several financial regulators were already moving in the direction of incorporating climate change risk in their monitoring of banks and financial institutions. On Thursday, they got validation from the highest level of government.

President Biden’s sweeping order directing member agencies of the Financial Stability Oversight Council to examine financial risks posed by climate change could lead to concrete changes in bank stress tests, mortgage underwriting rules and flood insurance pricing, observers said.

Broadly speaking, the move brings new urgency to steps regulators have already explored or considered, some said, while providing agencies with more cover to craft regulatory policies that Republicans have attacked as politically motivated. The executive order requires FSOC to issue a report on policy recommendations in 180 days.

“In some ways, it is going to be a modern day war chest, in that Democrats are going to look at the executive order and say, ‘This is exactly what we need to do to ensure the safety and soundness of these institutions and of our economy, and there is a direct connection between the environment and the economy,’” said Ed Mills, a policy analyst with Raymond James.

The administration’s missive on climate-related financial risks outlines a “whole of government” approach to safeguarding financial stability.

Biden’s directive urges the FSOC to issue recommendations on how agencies can incorporate climate risk into regulatory and supervisory practices. The order echoes comments from Treasury Secretary Janet Yellen indicating that she wants the council to focus on climate change.

“This executive order I think does have the appropriate urgency, and we appreciate that the president did it in his first 150 days, and [that] each of those areas have a timeline,” said Steve Rothstein, managing director at the Ceres Accelerator for Sustainable Capital Markets. “It is an urgency that we hope every bank feels.”

Biden’s directive urges the FSOC to issue recommendations on how agencies can incorporate climate risk into regulatory and supervisory practices. The order echoes comments from Treasury Secretary Janet Yellen, who chairs the council, indicating that she wants addressing climate change risk to be one of the panel’s priorities.

The order also instructs Biden’s national climate advisor, Gina McCarthy, and Brian Deese, the director of the National Economic Council, to develop within 120 days a “comprehensive government-wide climate-risk strategy” to pinpoint and disclose climate-related risks to government programs, assets and liabilities.

“With so much at stake, this Executive Order ensures that the right rules are in place to properly analyze and mitigate these risks,” a fact sheet outlining the directive reads. “That includes disclosing these risks to the public, and empowering the American people to make informed financial decisions.”

Under the order, the Department of Housing and Urban Development Secretary Marcia Fudge, along with the heads of the Agriculture Department and the Department of Veterans Affairs, will also be required to consider incorporating climate risk into underwriting standards for government-backed mortgages.

Analysts say regulators could spotlight the risks of lending to homeowners or builders for properties more susceptible to flooding.

“This should change mortgage underwriting. That means consumers seeking to buy homes that are more at risk of flood damage or to other impacts from climate changes may have more trouble getting credit or may need to pay more for their mortgages,” said Jaret Seiberg, an analyst at Cowen Washington Research Group, in a research note.

Rothstein said policymakers should consider subsidies for homeowners who cannot afford flood insurance protection.

“We should build the real price of the cost of a mortgage, including flood risk, into that mortgage price, and if people can’t afford it, we should build in those subsidies, and we should figure out how to address that or else we will be institutionalizing segregation and the racism that exists for another generation,” he said.

The executive order comes as numerous regulators including the Federal Reserve, Office of the Comptroller of the Currency and Securities and Exchange Commission have intensified their focus on evaluating climate change risks.

But it still matters for the White House to lay out the same set of goals for protecting financial stability.

“The whole financial industry is so incredibly complex and interwoven, and so it makes sense that from the top, that we begin really with a collective effort to go assess and identify the risks that are out there, so that each component of this very intricate machine can then address the risks that are seen,” said Randell Leach, CEO of Beneficial State Bank, a community development financial institution with more than $1 billion of assets.

The SEC has sought input on developing new disclosures about climate change risk for public companies, including banks. Biden’s executive order also provides support for the Fed to continue exploring the idea of stress testing banks against climate risk.

“This endorses the idea that financial firms should be stress tested on their exposure to climate change,” said Seiberg. “This means assessing whether financial firms are especially exposed to areas that could be subject to floods, hurricanes, and fires. And if losses from any of these climate change events could threaten solvency of financial firms, which could then put the financial system at risk. As a result, we see climate change stress testing as part of the new normal.”

Jamal Raad, the executive director of Evergreen Action, called the executive order “groundbreaking.”

“For the first time ever, an American president is taking bold action to address the risks that climate change poses to our financial system, our lives and our livelihoods,” he said in a statement.

The existing work from bank regulators to examine climate risk, along with Thursday’s executive order, has come under fire from Capitol Hill Republicans who argue that global warming is outside the scope of the banking agencies.

“Today’s executive order demonstrates that the Biden administration is preparing to misuse financial regulation to further environmental policy objectives,” said Sen. Pat Toomey, R-Pa., the ranking member of the Senate Banking Committee, in a statement after the directive was issued.

Rep. Frank Lucas, R-Okla., said in a statement that the directive was an “overstep of the executive branch and the agencies who serve our nation’s financial system.”

“Instead of financial regulators who lack the know-how or an administration who vows to put their thumb on the scale of businesses and industries serving the American people, it should be Congress and innovation that moves our country towards a cleaner future,” he said.

For Republicans like Toomey and Lucas, the effort to incorporate climate risks into bank regulation is likely reminiscent of Operation Choke Point, an Obama-era program that sought to investigate banks doing business with “higher risk” companies, like gun dealers and payday lenders, said Mills.

“There is a desire for both Democrats and Republicans to say, this is why it matters who you vote for president, because these regulatory agencies have the ability to impact all of these different parts of the executive branch and how our government prioritizes different policies,” he said.

But despite the executive order, regulators are likely to continue moving carefully on climate change until they get their arms around current climate models and how they can measure bank exposure, said Cliff Rossi, executive-in-residence and professor at the University of Maryland’s Robert H. Smith School of Business.

“You can make some terrible economic decisions based on this,” said Rossi, a former senior risk executive at Citigroup, who is studying the effects of climate change on housing. “We have to understand what’s going on first with the climate models we use before making assessments.”

Biden’s executive order could help to offer more visibility in that space, said Leach.

“The risk is real and what we don’t have is good information on how to manage it, especially in the banking sector,” he said.

The order could also be a wake-up call for banks that were not yet paying attention to their exposure to assets that could be affected by climate change, said Rothstein.

“This order will indirectly affect every bank, not directly from a regulatory perspective, but it will have an impact, and the message is: climate is a real risk,” he said. “It’s also a real opportunity from a business perspective — new businesses, new jobs — and that everyone needs to play a role to address this.”

Biden plan calls for $100 billion in new EV consumer rebates Posted by AVCU on 9:23 AM

 The Biden administration's $174 billion proposal to boost electric vehicles calls for $100 billion in new consumer rebates and $15 billion to build 500,000 new electric vehicle charging stations, according to a U.S. Transportation Department email sent to congressional staff and seen by Reuters.

The EV rebates, part of a $2.3 trillion infrastructure and jobs proposal, could be a big boost to U.S. automakers, especially General Motors and Tesla Inc., which no longer qualify for $7,500 tax credits after they sold more than 200,000 zero-emission models.

The White House declined to say how the $100 billion would be distributed or how much the grants will be.

In 2019, Senate Democratic Leader Chuck Schumer proposed awarding $392 billion in subsidies for owners to trade in gasoline-powered vehicles at least eight years old and in driving condition for EVs, plug-in hybrid or fuel-cell cars. The old vehicles would be scrapped.

The Biden plan also calls for $20 billion for electric school buses, $25 billion for zero emission transit vehicles and $14 billion in other EV tax incentives.

Treasury said in a report the proposed incentives are "to encourage people to switch to electric vehicles and efficient electric appliances."

U.S. Sen. Debbie Stabenow and Rep. Dan Kildee, both D-Mich., have been working on a bill to revise and expand the EV tax credit, they said in a recent joint interview with Reuters.

Kildee wants to skew the credit in favor of vehicles with more affordable vehicles with longer range, to "democratize the electric vehicle market."

He said they are "looking at ways to make the credit more accessible to middle- and lower-income families, potentially even making the credit refundable."

Kildee said EVs are "where the market is going -- full stop. The only question that we have to answer is are these going to be vehicles made by American workers." Kildee said they could also introduce a credit for used EV purchases.

Stabenow said it was important to give automakers incentives to produce EVs in the U.S.

"China has committed $100 billion to grab this market -- both battery cell production but also in other component parts of electric vehicles," Stabenow said. "We better take it seriously."

The Biden plan also calls for $80 billion for rail, including $16 billion for Amtrak's national network and $39 billion to fix the northeast corridor -- especially infrastructure in the New York City-area.

Cracking down on robocalls Posted by AVCU on 12:58 PM

According to the VtDigger, President Trump signed into law bipartisan legislation championed by Rep. Peter Welch that will crack down on unwanted and predatory robocalls.

“Vermonters are fed up with intrusive robocalls that are annoying at best and predatory at worst,” said Welch. “These calls often originate from scam artists intent on ripping off unsuspecting consumers, particularly seniors. This is a bipartisan win for Vermonters that gives the FCC the tools it needs to be the cop on the beat to go after these bad actors.”

Robocalls have dramatically increased in Vermont and nationally. In 2018, 47 billion robocalls were made in the United States, representing a 64 percent increase over 2016. In 2016, scams involving robocalls cost 22 million Americans a total of $9.5 billion.

The new law will:

• Ensure the FCC has the authority to take decisive action to track down robocallers violating the law;
• Allow consumers to revoke prior consent to receive calls;
• Require carriers to offer call-authentication technology to consumers and small businesses—in rural and urban America—at no additional charge;
• Require opt-in or opt-out robocall blocking be offered at no additional charge to consumers;
• Require the FCC to work to stop one-ring scams; and
• Extend the statute of limitations from one to four years for robocallers violating the law.

In May, Welch was joined at an airport press conference by Vermont Attorney General TJ Donovan and Shelburne senior Kathryn Ottinger to highlight legislation he cosponsored to tackle the problem. Mrs. Ottinger shared her experience of being bombarded at her home by daily robocalls.

During House debate on the bill, Welch spoke about how the bill would benefit Mrs. Ottinger and other Vermonters. Here is video of his remarks.  Welch is a senior member of the House Energy and Commerce Committee from which the bill originated.

House Members Ask Regulators About Concerns with Bank Purchases, CRA, and More Posted by AVCU on 9:43 AM

On Wednesday, several members of Congress had questions for the chairs of the NCUA and the FDIC during testimony before the U.S. House of Representatives. Much of the discussion during the regular appearance by financial institution regulators revolved around credit union purchases of banks. The hearing took place just one day after the largest such deal to date was announced.

NCUA Chairman Rodney Hood (Photo credit: CUtoday.info) and FDIC Chair Jelena McWilliams appeared before the House Financial Services Committee during a regularly scheduled hearing for financial institution regulatory agencies. Following their prepared remarks, during questions by members of the committee, Rep. Blaine Leutkemeyer (R-MO) asked both Hood and McWilliams about their “concerns” over credit unions buying banks.

“These are voluntary, market-based transactions,” responded Hood.

“There have been 28 acquisitions to date and others are pending,” answered McWilliams. “Yes, we have concerns and are looking at this…”

Rep. Trey Hollingsworth (R-IN) said he has had discussions with both Hood and his constituents related to CU acquisitions of banks and has heard both positive and negative views on the issue. Hollingsworth pressed Hood for his view on the issue.

“There have been 32 credit unions that have acquired bank assets since 2013. There have been 250 bank on bank acquisitions over the last year alone,” said Hood. “These are voluntary, market-based transactions. In approving these transactions we at NCUA look to ensure that the bank’s customers qualify for the FOM, and that other statutes of FCU Act are met. And I would note that if not for credit unions acquiring some of these banks, some communities would be left without a financial institution. At the end of the day, the bank does get to choose who that acquiring institution is. It’s not arbitrary or capricious.”

In response to legislator questions regarding the credit union income tax exemption, Hood said, “...in today’s dynamic marketplace, at the end of the day {consumers} are getting access to affordable financial services. I would much rather have both banks and CUs growing…I don’t want to pit banks against credit unions. Credit unions now serve a third of the American public and I think that is due to their commitment to providing access.”

When asked about whether credit unions should be subjected to the Community Reinvestment Act, Hood replied, "Credit unions are based on a mission of people helping people. They are serving low-income people through their products and services they already offer.  I don’t think credit unions need government fiat to encourage them to do the right thing.”

Kansas CUs Fend Off Statehouse Tax Threat Posted by Association of Vermont Credit Unions on 1:26 PM

According to reporting by CU Journal, earlier this month a Kansas state Senate committee met to SB.238, which would decrease the state income tax on banks, and also SB.239 to tax credit unions over $100 million in assets. Both bills were crafted by the Kansas Bankers Association.

On Tuesday of this week the 11-member committee voted to “not recommend” the credit union tax bill and decided to make “no recommendation” on the bank tax bill. Instead, the Kansas legislature called for more research data on the topic. The Kansas legislature's decision on the credit union taxation bill was a win for the the Heartland CU Association and the entire industry.

The CU association said that banks want a double standard in the form of creating a loophole so they can be taxed like not-for-profits without having to play by the same rules as not-for-profits. In its testimony, the association highlighted economic factors, including that banks control 99% of the commercial market in the Sunflower State.

Credit unions may only account for 1% of the commercial market, says the Association, but that includes small businesses and farmers that banks aren’t willing to take a chance on.  It also argued that Kansas has lost 244 credit union charters in the past five decades, declining from 322 credit unions in 1969 to 78 credit unions today.

The battle in Kansas is the latest banker state-level attempt to impose taxes or restrictions on credit unions. In February, the Nebraska Banking, Commerce and Insurance Committee considered a bill that would have required state regulators to notify banks whenever a CU applied to expand its field of membership. An in 2018, an effort to tax Iowa credit unions ultimately failed, but two credit unions were forced to change their names to comply with legislation that prohibits Iowa credit unions from using the name of state universities in their own name.

Read the original CU Journal article.

Banker Group's New Campaign Wants Congress to "Wake Up" to "Risky, Tax-Subsidized" CUs Posted by AVCU on 9:51 AM

On Monday, the Independent Community Bankers of America (ICBA) launched a nationwide campaign calling on policymakers and the public to “Wake Up” to the “risky practices, costly tax subsidies, and irresponsibly lax oversight of the nation’s credit unions.”

Both credit union trade groups have responded, with CUNA  clarifying the reason for the credit union tax exemption and issuing a statement citing the more than a quarter-trillion dollars paid by banks in fines over the last decade, and NAFCU saying the real issue is big banks "eating community banks' lunch." (CU Today, 10/21/19)

The ICBA said the Wake Up campaign (click here for video) will encourage policymakers to “open their eyes to the growing threats posed by these financial firms’ abandonment of their founding mission facilitated by their captive federal regulator,” the National Credit Union Administration.


“ICBA and the nation’s community banks are calling on Washington to stop pressing the snooze button and wake up to the risks of aggressive, growth-obsessed credit unions and the costs of their taxpayer-funded subsidies,” says ICBA President and CEO Rebeca Romero Rainey repeatedly while berating the viewer to "Wake Up!".

“With credit unions abandoning their founding mission in the name of expansion and risky lending, it is long past time for Congress to level the playing field between community banks and credit unions while reining in the National Credit Union Administration’s expand-at-all-costs agenda.”

Read more on CUToday.info

CU Advocacy Training for Young Professionals Posted by Association of Vermont Credit Unions on 12:26 PM

Young credit union professionals interested becoming strong advocates for the credit union difference will have two opportunities to learn the tools and best practices for success this September.

On Monday, September 9 and Monday, September 23, CUNA will host the third annual Young Professionals Advocacy Workshop at Credit Union House in Washington, DC. Registration for the trainings is still available on the CUNA website.

“There’s been a massive influx of interest and energy from next generation leaders in the last few years,” says Adam Engelman, CUNA’s director of federal grassroots advocacy. “They embody the credit union movement’s passionate for giving back to their communities. They see the good work credit unions are doing in their communities and want to amplify that good work.”

Engelman will address and host the workshop along with Richard Gose, CUNA’s Chief Political Officer, and Trey Hawkins, Deputy Chief Advocacy Officer for Political Action. The interactive program will feature:

• a panel of young Congressional staffers
• updates from League personnel
• an overview of CUNA’s political program, and
• opportunities to network with other attendees. 

“Regardless of what your title is within your credit union, you should reserve some time to care about advocacy and to advocate on behalf of the credit union movement,” says Engleman in the latest CUNA News podcast.

The day-long training will also offer networking opportunities, interactive Hill visit training, personal story work-shopping, and a reception at Credit Union House, with opportunities to apply the skills honed during Capitol Hill visits the following day.

More details and registration are available online.

Podcast: Young Professionals & Advocacy Posted by AVCU on 3:06 PM

Young professionals realize their role entails more than just their daily credit union duties. And they know the movement’s future depends on their involvement in advocacy. “There’s been a massive influx of interest and energy from YPs the last few years,” says Adam Engelman, CUNA’s director of federal grassroots advocacy. “They embody the credit union movement in the sense that they’re passionate about giving back to their communities. They see the good work credit unions are doing in their communities.”

Many YPs are advocating by meeting with elected officials, attending national conferences, participating in advocacy training events, and telling their stories through letters.

“Regardless of what your title is within the credit union,” Engelman says, “you should reserve some time to care about advocacy and to advocate on behalf of the credit union movement.”

Engelman explains why young professionals should get involved in advocacy, how they’re advocating, and more.

Listen to Engleman's episode on the CUNA News Podcast below.

Time to Update Project Zip Code Data Posted by AVCU on 1:26 PM

A new version of AVCU's Project Zip Code version 19.0 is now available for download at www.pzconline.com/install. Project Zip Code (PZC) is a program that matches raw credit union membership data with state and federal lawmaker districts.

Our only mission is service to members, who are our greatest grassroots strength. PZC enables us to quantify this strength and illustrate to lawmakers the number of credit unions members in their district. The ability to show a lawmaker how many thousands of credit union constituents they have is an extremely powerful advocacy tool.

No personal data or individual information is ever collected or leaves the credit union. PZC receives only the counts of records successfully matched, and all data remains secure. PZC is compliant to with all state and federal privacy laws and regulations.

Currently 99 million credit union members have been matched to their federal and state legislative districts.

VT Bankers Urge Congressional Review of NCUA, CU Mission Posted by AVCU on 12:49 PM

On Wednesday of this week, the Vermont Bankers Association joined 50 other state-level bank trade associations in a joint letter to the leaders of the Senate Finance Committee and House Ways and Means Committee.  They called for a review of the credit union industry to determine whether it is living up to its statutory mission of serving people of “small means.” The joint letter from bankers in all fifty states and the Commonwealth of Puerto Rico, also called for a thorough examination of the NCUA and its oversight of the credit union industry.

Citing research from an American Bankers Association commissioned study released in June, the state associations raised concerns that credit unions are actually contributing to greater economic inequality and endangering taxpayers by:

• increasingly providing services to high-income consumers rather than low to moderate income consumers
• making high risk loans
• buying up tax-paying banks, and
• that the NCUA has enabled credit unions to creep far beyond their statutory authority while allowing regulatory capital requirements and other safety and soundness rules to become substandard.

Not surprisingly, the letter fails to disclose that the research cited was commissioned by the American Bankers Association which throws into question its objectivity.

• Read the Joint State Bank Association letter. 
• Read the latest ABA study on credit unions. 

Video: CU Impact of Chinese Tariffs Posted by AVCU on 1:52 PM

In the May edition of the CUNA Economic Update, sponsored by CUNA Finance Council, CUNA Chief Economist Mike Schenk explores President Donald Trump’s decision to increase Chinese tariffs from 10% to 25% and its impact on the U.S economy.

“Trade wars are not good and generally very hard to win,” says Schenk. “Ultimately, free trade is good for economic growth in the long run and it increases efficiency.”

The May video also features:

• A U.S. labor market update – 263,00 jobs created in April and the unemployment rate reaches historic lows
• Credit union loan growth will begin its typical seasonal acceleration
• The long-term deficit problem and its impact
• State-level bank attacks

The May 2019 CUNA Economic update is freely available to CUNA members. Watch the May update below.

Bankers Call for CU Tax Again, Calling a Cheerleader Posted by Association of Vermont Credit Unions on 3:16 PM

As reported by CU Times, the Independent Community Bankers Association (ICBA) on Monday renewed their call for Congress to re-examine the credit union tax exemption in an effort to “promote a level playing field” for financial institutions.  The ICBA released its “Community Focus 2020” legislative agenda in which it singled out credit unions and the NCUA for criticism.  In the report, ICBA claims . . .

Today’s credit unions are leveraging their tax subsidy for rapid growth, purchasing multi-million-dollar stadium naming rights, flaunting their nearly unlimited fields of membership, and expanding their activities well beyond their original mission.  ICBA continues to oppose attempts by the NCUA to flout statutory limits and liberalize restrictions on fields of membership, member business lending, and issuing supplemental capital.

The bankers contend that credit unions have become “virtually indistinguishable” from banks.
But having finished a comprehensive tax overhaul effort during the last Congress, the House and Senate may be unwilling to open the tax code for major changes. On the other hand, Congress may make so-called technical corrections legislation making small changes to the bill that was enacted.

In that case, bankers could attempt to convince lawmakers to add credit union provisions to that bill.

The ICBA also said that Congress should:

• subject credit unions to the Community Reinvestment Act
• require greater disclosure of credit union compensation, and
• insure that regulations make it as easy for a bank to acquire a credit union as it is for a credit union to acquire a bank

Ironically, on most other legislative and regulatory issues, the ICBA’s agenda mirrors many of the priorities set by CUNA. For instance, the ICBA called on lawmakers to guarantee that merchants be required to follow the same data security standards that financial institutions must follow and to create a safe harbor to allow financial institutions to serve marijuana-related businesses.

Dem's Draft Bill to Reverse Mulvaney CFPB Moves Posted by Association of Vermont Credit Unions on 12:59 PM

As reported by CU Times, House Financial Services Chair Maxine Waters (D-Calif.) is preparing to go head-to-head with CFPB Director Kathy Kraninger with the drafting of legislation to reverse decisions made by former Acting Director Mick Mulvaney.  Waters and Democrats on her committee were scheduled to hold a news conference about the bill today.

The hearing and the legislation are certain to provoke a clash between Waters and Kraninger during a committee hearing on Thursday. Kraninger said during her confirmation hearing that she agreed with Mulvaney’s decisions at the agency.

In a memo in preparation for Thursday’s hearing, Democratic staff said there has been a significant drop in enforcement actions at the agency since former Director Richard Cordray, an Obama Administration nominee, left. 

The draft legislation being circulated is pointed in its criticism of Mulvaney. “The statute establishing the Consumer Bureau has been grossly misinterpreted under Mr. Mulvaney’s leadership, in a manner that is inconsistent with the agency’s statutory purpose, objectives, and functions,” it states, adding, “The Consumer Bureau, now under a new Director, should promptly reverse all anti-consumer actions taken during Mr. Mulvaney’s tenure.”

The draft legislation would, among other things:

• Require that the agency be named the Consumer Financial Protection Bureau. Mulvaney had said that the proper name of the bureau was the Bureau of Consumer Financial Protection. Kraninger reversed the decision.
• Restrict the reorganization of bureau units, offices, and boards. Mulvaney reorganized the bureau’s fair lending office, moving it to the director’s office.
• Limit the hiring of political appointees by the director. Mulvaney has been criticized for the appointment of political employees.
• Ensure that the agency’s consumer complaint database remain public. Mulvaney had questioned whether such complaints should be open.
• Formally establish offices of Fair Lending and Equal Opportunity and Students and Young Consumers.
• Expand the Consumer Advisory Board and ensure that two-thirds of its members “represent the interests of consumers.”
• Ensure that other advisory boards, including one dealing with credit unions, have at least one-third of its membership representing consumer interests.

Schumer, Sanders Re-elected to Senate Democratic Leadership Posted by Association of Vermont Credit Unions on 11:00 AM

As reported by the Hill, an inside the Beltway political publication, Senator Charles Schumer (D-N.Y.) was elected Senate Democratic leader by his peers on Wednesday of this week.  The minority leader was re-elected by acclamation in the closed-door meeting. Schumer has served as Senate Democratic leader since 2017.

The Senate Democratic caucus also re-elected Vermont Senator Bernie Sanders as Chair of Outreach, which is 1/2 half of the Senate Democratic Steering and Outreach Committee.  The Committee focuses on fostering dialogue between Senate Democrats and leaders from across the nation.  Members of the committee serve as liaisons between Senate Democrats and the advocacy groups and intergovernmental organizations that want to work with them. The Steering and Outreach Committee, by its own description, helps to set the Democratic Party's agenda in the Senate.

As the top Democrat in the Senate, Schumer will have to navigate the presidential ambitions of several members of his caucus who are considered potential 2020 contenders and negotiate with Republicans heading into the next election. Senator Dick Durbin (D-Ill.) is up for reelection in 2020 will remain Senate Democratic whip.  Senator Patty Murray (D-Wash.) will keep her position as assistant Democratic Leader. Senators Debbie Stabenow (D-Mich.), Elizabeth Warren (D-Mass.), Mark Warner (D-Va.), Amy Klobuchar (D-Minn.), Bernie Sanders (I-Vt.), Joe Manchin (D-W.Va.) and Tammy Baldwin (D-Wis.) are also remaining in leadership. Warren, Klobuchar and Sanders are considered potential 2020 presidential contenders, while Warner is up for re-election. Manchin and Baldwin were re-elected last week in states Trump won in 2016.

Watch Schumer's press conference below.

John Kerry to Headline CUNA GAC Posted by Association of Vermont Credit Unions on 1:05 PM

Former Senator & Secretary of State
John Kerry

Serving four years as Secretary of State, 30 years on the United States Senate, and 28 years on the Senate Foreign Relations Committee, John Kerry will bring his extensive experience and insights to the leaders of the credit union movement at the CUNA Governmental Affairs Conference (GAC), which takes place March 10–14, 2019 in Washington, D.C.

“Credit unions have a rich history of supporting Americans through financial education and grassroots community building,” said Secretary Kerry. “Advocacy is a critical component in keeping that spirit of cooperation alive, and I’m thankful for this opportunity to lend my contribution.”

John Kerry’s record of political service includes his key role in the Paris Climate Accord, which he signed in 2016, his position on the bipartisan Joint Committee on Deficit Reduction and his groundbreaking diplomatic contact with Iran in 2013. He also served as a Lieutenant in the United States Navy, returning from service in Vietnam with a Silver Star, a Bronze Star with Combat V, and three Purple Hearts. He is the best-selling author of both A Call to Service: My Vision for a Better America and This Moment on Earth.

CUNA's Governmental Affairs Conference is the largest credit union advocacy event, gathering more than 5,000 credit union leaders annually to Washington, D.C
., to network, learn about the latest issues and hot topics in the credit union industry, and meet with lawmakers to make a case for fair regulation on behalf of the more than 110 million credit union members nationwide.

Learn more about the CUNA GAC and register online.   
Get Vermont specific details via email inquiry to GAC@vermontcreditunions.coop 

Free Webinar: Post Election Analysis for CUs Posted by Association of Vermont Credit Unions on 11:21 AM

CUNA staff will host a post-election webinar this Thursday to provide credit unions with a comprehensive breakdown on how the election results will shape credit union and league advocacy efforts going forward. The event is scheduled for 3:30 p.m. to 4:30 p.m. on 11/8.

The webinar, hosted by CUNA President/CEO Jim Nussle, Chief Advocacy Officer Ryan Donovan, Chief Political Officer Richard Gose and Deputy Chief Advocacy Officer for Political Action Trey Hawkins will cover the following:

• CUNA’s political and grassroots efforts to secure a credit union-friendly majority in both chambers for the 116th Congress;
• How the results will impact credit union advocacy priorities, including potential leadership changes and new committee members;
• How credit unions can best navigate the post-election advocacy environment; and
• CUNA’s white paper on what the election means for credit unions, which will be released after the webinar.
• Nussle, Donovan, Gose and Hawkins will also answer questions at the end of the webinar.

CUNA and leagues are supporting 388 candidates in races for the U.S House and Senate in this year’s mid-term election.

This event is free for CUNA members. Find more details and register online.

Study: CUNA/Leagues = Most Influential DC Financial Services Advocates Posted by Association of Vermont Credit Unions on 11:23 AM

CUNA and the State League system are seen as the most influential financial services organizations and one of the most effective advocacy organizations in Washington, according to an independent study conducted by Ballast Research (formerly National Journal Research). This is the 2nd year in a row CUNA is the leading association at representing the interests of its members, due to its success in creating the credit union narrative and sharing their story among Washington policymakers.

Association of Vermont Credit Unions president Joe Bergeron commented on the study, saying that AVCU is "fortunate to be part of such a highly regarded advocacy team, both in Washington, DC.  In  Montpelier, VT we shoulder all of the responsibility for safeguarding Vermont credit unions and their members, and garner similar regard from statehouse officials."

Ballast Research gathers policymakers’ perceptions for the 100 of the most prominent advocacy organizations.  The research findings are based on two key measurements:

• Long-term reputation, which is calculated by a combination of scores in four distinct measures: respect, consideration, influence and sharing; and
• Advocacy tools/tactics to include media, lobbying and research.

More than 1,200 policymakers were surveyed, and more than 400 senior policymakers were interviewed for the 2018 report.

Other highlights of the study include:

• CUNA is named number one #1 in representing the views of credit unions among organizations studied;
• For the 3rd year in a row, the CUNA-League System is rated the most influential financial services organization among organizations studied;
• Policymakers have greater respect for CUNA’s role in policymaking than its peers;
• Policymakers see CUNA as the best in the industry – and in the top 25% of all associations studied – at talking about the financial services industry in ways that matter;
• CUNA leads all associations studied in representing the voice of its membership for the second year in a row; 
• Significantly more so than its peers, policymakers see CUNA as setting high standards for the financial services industry and pushing industry practices that are beneficial to consumers
• In a comparison of the 48 most prominent associations in the study, CUNA and the leagues’ reputation is rated number nine by Washington’s senior policymakers.  

Bitcoin: Russian Hackers' Preferred Currency Posted by Association of Vermont Credit Unions on 10:38 AM

According to an American Banker article, bitcoin was the currency of choice among the Russian intelligence officers indicted for hacking offenses related to the 2016 presidential campaign. The conspirators primarily used the virtual coins when buying servers, registering domains and making other payments related to the cyber breaches, according to the indictment. Many of the transactions were processed by U.S. companies.

The defendants laundered the equivalent of over $95,000 through a web of transactions structured to capitalize on the perceived anonymity of cryptocurrency.

The 12 intelligence officers indicted by Special Counsel Robert Mueller are members of the GRU, a Russian intelligence agency. They are accused of stealing usernames and passwords of volunteers in Democrat Hillary Clinton's campaign, including its chairman, John Podesta. They also hacked into the computer networks of the Democratic National Committee and the Democratic Congressional Campaign Committee, in an operation starting around March 2016.

Read the full article on American Banker.