WASHINGTON–America’s Credit Unions has sent a letter to NCUA on Proof of Concept for groups organizing new CU charters and to the Department of Justice on laws it says have negative effects, respectively.
The Letter to NCUA on Proof of Concept for New Charter Organizing Groups was sent in response to a charter modernization process undertaken by the agency’s Office of Credit Union Resources and Expansion (CURE) that is seeking to improve the quality of charter applications received.
In its letter, America’s Credit Unions offers support for:
- Ongoing efforts to modernize new charters
- The NCUA provisional charter pilot program
- Continued prioritization of field of membership reform.
“Taken together, these steps will ensure more communities across the country have access to the unique benefits of cooperative, member-owned financial institutions,” the trade group said.
Letter to DoJ
In its Letter to DoJ responding to RFI on State Laws having significant adverse effects, America’s Credit Unions said a growing patchwork of state laws and regulations in key financial and consumer protection areas is imposing “undue burdens on credit unions and other businesses across state lines, resulting in higher consumer costs and less robust markets nationwide.”
“Congress should enact uniform national standards that preempt conflicting state laws across four domains: payment-card interchange and routing, consumer data and biometric privacy, artificial intelligence, and elder financial exploitation,” said ACU’s head of regulatory advocacy, James Akin.
Examples Cited
As examples, America’s Credit Unions cited:
- The Illinois Interchange Fee Prohibition Act (IFPA), which prohibits collection of interchange fees on portions of transactions representing state or local taxes or gratuities. ACU said the bill would “upend the nationally integrated card payments system,” burden national commerce, and pre-empts federal laws governing nationally chartered financial institution. As the CU Daily reported earlier, the Illinois Credit Union League successfully advocated for a one-year delay to the IFPA.
- The state fair lending and algorithmic bias laws that aim to regulate the use of AI and other underwriting processes in ways that it said burden businesses and conflict with federal law. As examples, it pointed to Colorado’s AI law, New York’s recent prohibition on the use of immigration status in underwriting, and state-level Community Reinvestment Act regimes in states including Illinois and Massachusetts;
- Consumer data privacy laws and biometric privacy laws. The letter notes that California, Texas, Maryland, and Minnesota have recently passed laws to this effect, “each adding their own twist on privacy rights and requirements,” that require national providers to build state-by-state workflows or default to the strictest rule
- Elder financial abuse reporting and protection laws that are inconsistent with reporting and intervention requirements. Protecting seniors from financial exploitation is a priority for all credit unions, but inconsistencies create burdens for institutions looking to meet all requirements, ACU said.
- AI-specific regulations that could have sweeping effects on interstate commerce. For example, California and Utah have AI regulation laws that would create mandates that essentially create a de facto national standard as developers work to stay in compliance.
Other Letters Going in the Mail
In addition, America’s Credit Unions said it will be sending a letter ahead of today’s House Financial Services Committee markup meeting reiterates ACU’s belief that “”any effort the House Financial Services Committee seeks in order to make community banking great again must include recognition of the role credit unions play and provide them with the same comparable relief as community banks.”
The letter highlights a number of additional areas the trade group said the committee must tackle to aid community financial institutions, including:
- Extending the Loan Maturity limit for credit unions
- Expanding options for credit union investments
- Provide greater flexibility for the credit union usury ceiling
- Increase the ability of credit unions to meet the needs of their small business members
- Make it easier for credit unions to join a federal home loan bank
- Modernize capital requirements for credit unions
Letter on Small Biz
America’s Credit Union is also sending a letter ahead of today’s House Small Business Committee meeting that it said outlines actions the Committee should consider to help credit unions better serve Main Street as it relates to SBA lending, including:
- Expanding Credit Union Participation in SBA Lending Programs
- Safeguarding SBA Programs from Risks Introduced by fintechs
- Opposing Direct Lending Initiatives
- Continued Disaster Relief Funding
- Supporting Business Lending for America’s Veterans
