What’s next after reg relief?

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SEATTLE—Credit unions have seen a series of regulatory and legislative wins this year, capped off by the passage of S. 2155, and one panel of experts says there could be more to come.

“Regulatory relief remains on the agenda, even though there may not be another comprehensive relief bill,” proclaimed Brad Thaler, VP of legislative affairs at the National Association of Federally-Insured Credit Unions. “Delay of NCUA’s risk-based capital rule could happen, as it is being attached to a few different bills. One problem with getting more done is Washington remains divided.”

Thaler’s remarks came during a panel discussion this week held in conjunction with NAFCU’s annual conference.

Joining Thaler on the panel was Alexander Monterrubio, director of regulatory affairs, who pointed out that NCUA and the Consumer Financial Protection Bureau are working to implement provisions found in S.2155. “Some are effective immediately, others will be worked on over time,” he said. “Member business lending changes are happening right now. We are working with NCUA to implement changes into exams.”

The panel’s remarks took place just days after President Trump nominated Kathy Kraninger to lead the CFPB – a move Monterrubio called a “surprise nomination.”

“She is at the Office of Management and Budget,” he noted. “She is someone who has been in government for a while and has a lot of experience in government management. The administration decided it wanted someone with management experience. We look forward to finding out her ideas on financial services.”

Monterrubio said Mick Mulvaney, acting director, of the CFPB, has been very proactive. “One of his issues is the request for comments on all parts of the CFPB. He wants to see how he can change the bureau to be more effective. He has been active structurally at the bureau, how it approaches supervision.”

Thaler added because Kraninger has no background in financial services, it will make for a “tougher” confirmation process. “Given the political climate, it will be tough to do the confirmation before the November election,” he assessed.

And when it comes to the mid-term elections, noted NAFCU Director of Political Affairs Chad Adams, CUs need to “stay engaged,” adding that the best way credit union supporters can help the movement legislatively is to get involved with grassroots efforts.

“It is important to develop relationships with lawmakers. It is part of their job to learn how laws affect their community,” he said. “Also, any time a regulator issues a request for comment, be sure to comment because they do read those.”

Political pundits have offered split predictions on whether or not the Democrats will take back one or both houses of Congress after this year’s elections, but Thaler said regardless of the results, leadership in the House of Representatives will be significantly different next year because so many lawmakers are retiring or resigning.

“There will be a new speaker, and new heads of many committees. Engage your legislators and keep up relationships.”

Thaler said CUs need to know even after comprehensive tax reform, the fight to protect the credit union tax exemption is not over. “It is very important to keep telling legislators the credit union message and story. Bankers are very happy to tell their version.”

ADA, pot banking

Lawsuits and threats of suits relating to alleged violations of the Americans With Disabilities Act have plagued credit unions over the past year, an issue both NAFCU and the Credit Union National Association have been active on. Brandy Bruyere, NAFCU’s VP of regulatory compliance, said part of the problem is the Department of Justice has not adopted standards for website accessibility.

“Unfortunately, in this void hundreds of credit unions have received demand letters,” she said. “About two dozen credit unions in Virginia were sued. NAFCU has filed 13 amicus briefs to date in Virginia. Six trial courts in Virginia have ruled in favor of credit unions, mostly because the person named was not eligible to join the credit union.”

Monterrubio said because rulemaking takes a long time, CUs probably will not receive any guidance from the DOJ on the ADA website issue in the near future.

Thaler said the ADA website issue has come under Congressional radar over the last six months because it is not just credit unions, or even financial services, it is all types of businesses that are receiving demand letters.

“That has helped create coalitions of businesses going to Capitol Hill asking for new laws,” he said.

On the same day as the NAFCU panel made its remarks, a bipartisan group of 100 members of Congress sent a letter to Attorney General Jeff Sessions and the DOJ calling for clarity regarding ADA rules.

The group also discussed potential changes to marijuana banking laws after an audience member from a credit union in New York asked the panel about accepting funds from legal marijuana growers. Thaler said Congress has this issue on its radar as more and more states legalize some form of marijuana.

“Just recently a bill was introduced that would create some safe harbors for providing business services if marijuana is legal at the state level,” Thaler said, adding President Donald Trump made an off-the-cuff remark that he is likely to support such legislation. “Attorney General Jeff Sessions is not a fan of marijuana, which creates a conflict in the administration. There is not yet the support to pass a bill in Congress, but support is growing. It is not really a partisan issue, it really depends on the state. It will take a while on the Congressional side.”

Bruyere said there are a few CUs that have followed the Cole Memo and have offered business services to marijuana businesses. “They still have FinCEN guidance, but AG Sessions has told federal attorneys they have the green light to prosecute.”

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Compliance Law and regulation ADA Marijuana banking NAFCU Washington