After the House dropped its version of the credit union interchange bill this week (H.R.8874), I put Sia’s Unstoppable on repeat:
All smiles, I know what it takes to fool this town
I'll do it 'til the sun goes down and all through the night time
Oh yeah
Oh yeah, I'll tell you what you wanna hear
Leave my sunglasses on while I shed a tear
It's never the right time
Yeah, yeah I put my armor on, show you how strong how I am
I put my armor on, I'll show you that I am I'm unstoppable
I'm a Porsche with no brakes
I'm invincible
Yeah, I win every single game
I'm so powerful
I don't need batteries to play
I'm so confident
Yeah, I'm unstoppable today
Unstoppable today
Unstoppable today
Unstoppable today
I'm unstoppable today… I put my armor on, show you how strong how I am
I put my armor on, I'll show you that I am I'm unstoppable……
Sometimes you need a bit of motivation. Do you remember when I said this is a long game? The Virginia Credit Union League and our members finished up its in-district legislative sessions and meetings in Washington during NAFCU’s Congressional Caucus- we met with members and staff of the full 13-member delegation. Thank you again to everyone who participated. We focused on interchange, overdraft and third-party vendor authority on defense and board modernization on offense. With the introduction of the Senate field of membership bill (S.4879) that would allow all credit unions to add underserved areas to their fields of membership there are some tough decisions on where to use our political capital on the horizon. With the introduction of the House bill we need to focus on fighting interchange.
Lobbying is Science + Art.
Science= number of constituents + data + persistence Art = timing + judgement + savvy use of political capital
Do we have it as an industry? We do, but need to work together and kick it into gear. On interchange, we’ve written letters to our representatives and senators, signed onto a joint letter from many trade associations, and even teamed up with the bankers on a joint letter opposing the bill. We’ve also had strong grassroots efforts on this, with credit unions and members using our Action Centerto write their Senators and Representatives. If you have not messaged your members of Congress through the Action Center, please do so now. If you've already sent a message on interchange, thank you, but please take a moment and do so again. This issue is that important.
In addition to NAFCU’s Caucus, many leagues have hike the hills in September:
Maine Credit Union League (September 13 – 15)
Ohio Credit Union League (September 12 – 14)
Connecticut Credit Union League (September 13 – 14)
California & Nevada Credit Union Leagues (September 13 – 15)
League of Southeastern Credit Unions (September 13 – 15)
Iowa Credit Union League (September 13 – 15)
Credit Union Association of the Dakotas (September 13 – 14)
Wisconsin Credit Union League (September 14 - 15)
CrossState Association (September 19)
Minnesota Credit Union Network (September 20 – 22)
West Virginia Credit Union League (September 20 – 22)
GoWest Credit Union Association (September 20 – 22)
Illinois Credit Union League (September 21 – 22)
New York Credit Union Association (September 27)
Tennessee Credit Union League (September 27 – 29)
Michigan Credit Union League (September 27 – 29)
Cornerstone Credit Union League (September 27 – 29)
Kentucky Credit Union League (September 28 – 30)
Carolinas Credit Union League (September 28 – 29)
In addition to all our efforts, I am glad the other leagues are hiking the hill as well. The issue of interchange has gotten unnecessarily convoluted with the decision by Visa, Mastercard and AmEx to categorize gun purchases separately. This is a red herring, but merchants have seized up on it and it was a huge factor in Rep. Gooden from Texas in introducing a House version of the bill. As for Vermont- they are all small retailers in the Green Mountain state. The best chance we have for stopping Interchange is to create as much noise as possible, NOW! Especially, to Senator Kaine. He has not taken a position yet on interchange and we need him on our side. As to our other members our Rs are with us and the Ds are non-committal, but none are on retailers side as of yet. We are hosting a Northern Virginia Legislative Reception on October 11th where Congressman Connolly (D-11) and other members of our Federal and state delegations will be joining us. This will be a great opportunity for you and your staff to share your concerns regarding changes interchange with your elected officials.
We also just had the opportunity to meet with CFPB Director Rohit Chopra last week. Time for Sia motivational song number 2, The Greatest.
Uh-oh, running out of breath, but I
Oh, I, I got stamina
Uh-oh, running now, I close my eyes
Well, oh, I got stamina
And uh-oh, I see another mountain to climb
But I, I got stamina
And uh-oh, I need another love to be mine
Cause I, I got stamina Don't give up; I won't give up
Don't give up, no no no
Don't give up; I won't give up
Don't give up, no no no I'm free to be the greatest, I'm alive
I'm free to be the greatest here tonight, the greatest
The greatest, the greatest alive
The greatest, the greatest alive Well, uh-oh, running out of breath, but I
Oh, I, I got stamina
Uh-oh, running now, I close my eyes
But, oh, I got stamina
And oh yeah, running to the waves below
But I, I got stamina
And oh yeah, I'm running and I'm just enough
And uh-oh, I got stamina Don't give up; I won't give up
Don't give up, no no no
Don't give up; I won't give up
Don't give up, no no no I'm free to be the greatest, I'm alive
I'm free to be the greatest here tonight, the greatest
The greatest, the greatest alive
The greatest, the greatest alive
Ahem. Director Chopra, we meet again. I first met the Director when he was part of the team setting up the CFPB (check,); did a stint at the Consumer Federation of America as a senior fellow when I was a CFA board member (check); was at the FTC when we were lobbying on robocalls (check,) and now I have re-met him in this most recent capacity. I thought we had a good meeting. Special thanks to League Board Chairman Joe Thomas and NextMark FCU for hosting us and also to the credit unions who attended and told their stories. On overdraft fees, Director Chopra spoke about the good work credit unions do for their members (“my own credit union will call people who use overdraft and talk to them about other options”), but also warned against becoming too reliant on this revenue. He advised that credit unions should have a multi-year plan to reduce their dependence on overdraft fee revenue. He also talked about one-size-fits-all regulation. He’s comfortable with two-tier regulation, but believes it should focus on “relationship banking” as opposed to banks vs. credit unions or an asset size threshold. How to define relationship banking is the challenge. Director Chopra feels strongly that credit cards are one of the best financial products on the market, and the fact that it’s getting harder to offer them isn’t a good thing. He believes credit unions shouldn’t shy away from the subprime credit card market. Our credit union leaders shared about the challenges posed by the interest rate ceiling for credit unions and the services they are providing in small dollar lending, financial education, and other areas of member service.
Where do we go from here? Well, we can’t let our guard down. If you don’t read the CFPB enforcement orders, I recommend it. It can help give a window as to the CFPB focus. Can we come up with a definition of relationship banking that exempts credit unions and per CFPB direction includes community banks? It is tough. Credit unions are member-owned cooperatives and are not for profit. Why can’t that be enough?
Tomorrow is a busy day for us as well. The NCUA is issuing its proposal relative to the statutory change making it easier to expel members. We expect the NCUA will be flexible in allowing credit unions to do the hearing and other things virtually. They are also going to do some tweaks to the subordinated debt rule. We were pleased to see that the NCUA is moving forward with approvals.
The NCUA is also going to issue a report on the share insurance fund. It is expected that the equity ratio will stay above the 1.2 floor that the NCUA is required to put a plan in place to restore it to that level. The ratio is normalizing due to decreased share growth, but still is below the 1.3 target that the NCUA likes to keep the fund.
In terms of upcoming engagement, I look forward to seeing many of you at the upcoming CEO Summit and Forum!
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.
