I had a dream over the weekend that I worked for a secret credit union lobbying organization. Randomly, Tracie Kenyon, President and CEO of Montana’s Credit Unions was the head of the organization. In this dream, I went into what appeared to be an empty school, where Tracie was waiting for me, alone, with an assignment. When I left the building on foot, a wolf began to follow me. Upon arriving at a fork in the gravel road a second wolf appeared. They kept their distance but tracked me all the same. Suddenly, a third wolf appeared in the distance on the road in front of me. When this third wolf appeared, all three wolves ran off. In my dream, this exact same scenario happened twice more. In the fourth sequence, when the third wolf appeared, the wolves did not run away, but instead inched closer and closer towards me. I tried to scream to scare them off, but only a whisper would come out of my mouth. Desperate, I finally managed a hoarse yell.
My husband woke me up and told me I was screaming in real life. A classic nightmare.
But I can’t stop asking myself, what is the third wolf? Bankers? COVID? Inflation? Congress? The Administration? The Supreme Court?
WHAT IS THE THIRD WOLF?
Legislative
Digital Assets. The House Financial Services Committee met today to review the President's Working Group (PWG) on Financial Markets' report on stablecoins. NAFCU and CUNA both issued letters ahead of the hearing. NAFCU flagged that the absence of a clear regulatory environment and appropriate supervisory framework poses risks to the adoption of otherwise promising technologies, such as digital assets. NAFCU also flagged that the PWG's report references the FDIC definition of a financial institution, which does not include credit unions. CUNA also focused on the lack of regulation but played up the consumer angle and that consumers need to be protected. The Virginia General Assembly is also tackling digital assets and a bill is moving through to authorize banks to hold digital assets - your League has also pushed for the same authority for credit unions.
Watching the Superbowl this weekend? Apparently, cryptocurrency advertisers have grabbed a lot of advertising slots.
Judiciary
Nominees. For the past few weeks, President Biden’s poll numbers have been universally low, but a few recent events have given him a framework for his approval rating to possibly improve. The retirement announcement of Justice Breyer has given the President the opportunity to nominate the first African American women to the bench - a campaign promise he appears to be keeping. President Biden has indicated he will announce his nomination by the end of the month. In response to calls to broaden his approach, he is seeking the advice and counsel of Senators on both sides of the aisle on the nominee, but it is expected that he will stick to his pledge. Regardless of the nomination, the Republican majority will remain on the Court, likely for quite some time.
Executive
Fees. CFPB Director Rohit Chopra announced at the end of January the CFPB is going after fees. Not just overdraft fees; but credit card fees, mortgage fees, and any so called “junk fees.” They have a Federal Register Notice calling for comments and a PR push aimed towards consumers. There are already 122 comments- almost exclusively from consumers with horror stories or simply complaining about fees in general. There are a few credit union mentions. We are monitoring this and will send you a note if your credit union gets mentioned, but I wanted to flag it. We will be sending comments on this issue. While I usually do not view mass grassroots action as an overly effective lobbying tool on the regulatory side, on this one we will prepare a response for you to send to the CFBP should you choose. I think we need to change the dialogue that all fees are abusive.
I did however enjoy this public comment: “While I agree that some banks can charge a large range of fees, I disagree with the CFPB's biased approach to this request. By classifying these fees as "junk" they are not truly seeking input on consumer experiences related to fees but rather support for their already established position these fees are junk. If the CFPB were truly concerned about junk fees, they should focus on fees that are charged by Federal, State, and local governments. For example, the CFPB has classified a bank charging a late fee as "junk", but all levels of government also charge late fees, and sometimes interest penalties, if something is paid late. Therefore, why is it acceptable for the government to do this, but not private businesses?
If the CFPB were really concerned about the financial impact of "hidden" costs, then they should be targeting all the hidden taxes imposed by all levels of government that needlessly result in people paying more for goods and services (e.g., hotel, resort, and restaurant taxes designed to bilk the tourist).
I must also add that fees charged by banks, in some degree, are changed to cover the administrative and risk costs of the extensive and needless regulations imposed by the Federal government and the CFPB in particular.
In the end, the CFPB needs to cease in their biased and antagonistic attack on banks and clean up their own house. "People who live in glass houses shouldn't throw stones."”
Mr. or Ms. Anonymous, thank you.
BTW - Next week I will have an update on where we are with Virginia’s COVID rules. The Virginia Department of Labor and Industry (DOLI) postponed their board meeting until next week. I look forward to seeing some of you on MACUMA lunch call tomorrow, where I will delve into some of these issues in more detail.
What is the third wolf!
Sincerely,
Carrie R. Hunt
President/CEO
P.S. How do you Credit Union? I would love to hear from you. Always feel free to shoot me a note or call.
