Week ahead: Last-minute business for NCUA, lawmakers

Some long-running sagas for the credit union community could be resolved this week.

Only a few days remain on the 2019 congressional calendar, but members of the House and Senate are said to have reached an agreement regarding the National Defense Authorization Act. Conferees from both chambers are expected to sign an agreement by the end of the day Monday, with the bill then being sent to the House for a floor vote on Dec. 11 followed by a Senate vote.

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Banks and credit unions have battled for months over a provision that would grant banks access to the no-cost land leases that credit unions hold. The provision was included in the Senate version of the bill but not included in the House legislation, so CUs are awaiting to see the NDAA's final version.

The National Credit Union Administration on Thursday will conduct its final open board meeting of 2019. Most notably, the board will vote on whether to delay implementation of its risk-based capital rule until Jan. 1, 2022, rather than the current implementation date of Jan. 1, 2020. Board member Todd Harper suggested earlier this year that by focusing on RBC, which only impacts a handful of credit unions, the agency is ignoring more widespread safety and soundness issues that could impact the National Credit Union Share Insurance Fund. Still, the delay is expected to pass, and NCUA Chairman Rodney Hood has said the board will use the additional time gained by a delay to rework capital policies for the industry, including rulemaking on subordinated debt and creating a credit union version of the Community Bank Leverage Ratio.

Notably missing from the agenda is guidance for credit unions acquiring banks, which Hood previously indicated would come before the end of the year. These deals have been one of the industry’s dominant trends throughout 2019, and Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions, defended them in a recent letter to Treasury Secretary Steven Mnuchin.

"These mergers are certainly not occurring at an 'alarming rate' and credit unions are not on a 'buying spree,' as some have suggested," Berger wrote.

A slew of bills are in House Financial Services this week and three are top of mind for CUs: the Cybersecurity Disclosure Act of 2019, the Ensuring Diversity in Community Banking Act of 2019 and the Expanding Opportunities for Minority Depository Institutions (MDIs) Act. Analysis from the Credit Union National Association finds that MDI credit unions are closing their doors faster than the rest of the credit union industry, at a rate of 32% compared to 25% of the wider CU world since 2011. MDI credit unions represent about 10% of all CUs and serve 3.9 million members, according to NCUA data.

The Federal Reserve will discuss its quarterly summary of economic projections this week. The economic projections report summarizes GDP growth, inflation, the unemployment rate and interest rates.

The clock for government funding is ticking until Dec. 20. As Congress attempts to finalize its spending bills before adjourning for the year, the possibility of impeachment articles in the House could delay a funding resolution being passed in a timely manner. Still, lawmakers could pass an additional short-term spending bill to avoid a government shutdown.

As reported, credit unions were heavily involved in the response to consumer woes prompted by the government shutdown that began just before Christmas last year

“In the absence of a continuing resolution, we continue to believe that our credit union members are well-positioned to support their members should another government shutdown happen as it did one year ago,” Eli Joseph, CUNA’s deputy chief advocacy officer, said Monday.

This story was updated at 3:31 P.M. on Dec. 9, 2019.