WASHINGTON—America’s Credit Unions has sent several letters to Capitol Hill and to the administration related to illicit finance in digital assets, the Home Mortgage Disclosure Act, and housing, respectively.
In its letter to the Treasury Department, America’s Credit Unions urged “parity” for credit unions when it comes to ways regulators can combat illicit finance in digital assets and to address the most significant risks with “thoughtful, innovative approaches.”
GENIUS Act Requirement
In a letter to Treasury, Head of Regulatory Advocacy James Akin offered the trade group’s response to a request for comment (RFC) on the issue with several recommendations.
As America’s Credit Unions noted, the RFI is required by the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which was passed earlier this summer and outlines a regulatory framework for stablecoins and gives federally chartered credit unions clear authority to serve as issuers and custodians of stablecoins once appropriate regulations are implemented.
“As Treasury develops the regulatory regime for payment stablecoins under the GENIUS Act, we believe it is crucial that the framework not be one-size-fits-all in a way that only the very largest institutions can participate,” Akin wrote, adding that the spirit of the legislation to encourage innovation “should extend to allowing diverse financial institutions, including credit unions, to issue or utilize stablecoins in a safe manner.”
The Most Serious Threats
The trade group noted the most significant illicit-finance risks in the digital-asset ecosystem include the use of anonymous or non-compliant exchanges, the abuse of mixers and other obfuscation tools to hide transaction trails, ransomware and cybercrime proceeds being laundered through crypto, and fraud schemes targeting consumers.
The Recommendations
America’s Credit Unions is recommending that to combat risks:
• Facilitate standardized, secure API frameworks that vendors can build into compliance products. “Promotion of APIs should remain technology-neutral and not become an implicit mandate.”
• Avoid prescriptive requirements that every institution must deploy AI and instead encourage a risk-based approach.
• Provide support through Treasury for initiatives to develop interoperable and privacy-preserving digital-identity frameworks. Regulations should encourage the use of reliable digital ID for crypto transactions but should not impose a single solution.
• Clarify so credit unions know how examiners will view the use or non-use of blockchain-analytics tools.
• Calibrate regulatory requirements for stablecoin issuers based on the nature of the stablecoin and the risks it presents, not simply on the charter of the institution.
Beyond the four categories contemplated in the RFC, America’s Credit Unions said Treasury should consider other new developments such as privacy-enhancing cryptographic tools, cloud-based AML solutions, and smart-contract analysis for compliance.
Letter to CFPB
In addition, America’s Credit Unions also sent a letter to CFPB Acting Director Russell Vought urging the agency to reduce regulatory-compliance burden by increasing the Home Mortgage Disclosure Act (HMDA) reporting threshold from 25 loans to at least 500. This change would better balance HMDA’s transparency goals with the operational realities of smaller institutions.
Letter on Housing
America’s Credit Unions President/CEO Jim Nussle also sent a letter to Senate Banking Committee Subcommittee on Housing, Transportation, and Community Development leadership providing additional actions that the committee could take to support credit unions uniquely positioned to complement the affordable-housing programs offered by the ROAD to House Act, which passed out of committee earlier this session.
The letter outlines the following recommendations:
• Partnering with FHLBs for Enhanced Member Service
• Advancing Home Ownership
• Expanding Field of Membership to Empower Credit Unions to Serve More Communities
• Pass Legislation to Allow Credit Unions to Offer Longer-Term Loans
• Pass Legislation to Increase Access to Financing for Accessory Dwelling Units (ADUs)
