Trade organizations for associated credit unions recently released their legislative outlines for the new year, most of which center around preserving the industry's tax exemptions and maintaining access to the secondary mortgage market.
The 2014 Legislative Priorities, as laid out by the Credit Union National Association and the National Association of Federal Credit Unions, emphasize continued support of the industry's staple - small business lending - and the importance of educating members of Congress on credit unions' tax-exempt status going forward. A transitioning secondary mortgage market, which continues to adjust to reduced influence by government-sponsored enterprises Fannie Mae and Freddie Mac, was also a point of primary concern, the Credit Union Times reported.
As the debate regarding housing finance reform carries on in 2014 and continued efforts are made to return the industry to sustainability, the trade unions stated their ongoing intentions to prepare for and take on an active role in the legislative process.
"In 2013 alone, credit union advocates sent 1.3 million messages to members of Congress to tell them with a unified voice, 'Don't Tax My Credit Union,'" said the CUNA.
Maintaining their standing
The NAFCU insisted that the tax exemptions that have long allowed for credit unions to remain viable are still essential to their place in communities small and large, and they help facilitate their ability to provide lending solutions to small businesses as well as individuals.
"NAFCU's 2012 landmark study on the economic benefits of credit unions confirmed the tax exemption is vital for credit unions' survival and a significant benefit for the country's economy as a whole," read part of the group's press release.
The evolving reform of Fannie and Freddie, NAFCU pledged, is something it will continue to support. Its primary concerns include the unimpeded and guaranteed access to the secondary mortgage market for its members, as well as loan pricing that is based on quality rather than portfolio volume.
The CUNA addressed the group's concerns that regulation remains too broad-based, as credit unions are subjected to the same rules and compliance standards as big banks, despite often lacking the resources or the level of congressional influence enjoyed by their larger counterparts. Ensuring that their voices are heard on Capitol Hill - and applying pressure when necessary - is of the utmost importance to the trade organizations, their members and their customers in 2014 and beyond.
"We all have real concerns about a world in which the secondary mortgage market is occupied by a handful of very large banks," read the CUNA release. "We know it is imperative that any new system facilitates credit union lending so we can continue to be a source of reliable mortgage credit for members. Continuing our efforts in 2013, we will be deeply engaged in the discussion on Capitol Hill, both by testifying at key hearings on housing reform issues and working with our members across the country to impress our message on Capitol Hill to maintain credit union access to the secondary market."
Monitoring new legislation
Each organization also addressed the risk-based capital rule that will be proposed by the National Credit Union Administration (NCUA) during the first quarter of 2014.
"We will be working as hard as we can to minimize the impact of whatever NCUA proposes, which NCUA has indicated will likely be in the first quarter of 2014," said the CUNA. "Meanwhile, we are urging NCUA to work with the credit union system to continue to support the statutory capital reform. This approach could appropriately address risk management but in the context of a system that also accommodates well-managed credit union growth."
For its part, the NAFCU reiterated its support for any legislation that fosters risk-based capital systems for credit unions, intimating that it will lean on the regulatory body - the NCUA - charged with making many of the decisions that would lead to such a system.
"NAFCU will also continue to steer the National Credit Union Administration away from a framework that divides the credit union industry into two separate categories as the agencies continue to consider implementing their capital rules," the organization said. "NAFCU believes any potential rule should reflect risk appropriate."
Limits to member business lending are something on which the CUNA, in particular, has directed its focus. The struggle to increase the ceiling for what many credit unions consider the lifeblood of their operations persists, and the hope is that pending legislation will assist in that fight.
"CUNA is encouraging Congress to enact the Credit Union Small Business Jobs Creation Act, which would allow well-capitalized credit unions operating near the business-lending cap to increase their business loan offerings to 27.5 percent of total assets, an approach that has been endorsed by the Obama administration," CUNA said.
Similarly, the NAFCU has stated its support for proposals that would raise the small-business lending cap for credit unions, as well as other related legislation that has recently been introduced in Congress.