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A closer look: CUNA sets four-pillar legislative agenda
WASHINGTON (1/3/13)--The Credit Union National Association (CUNA) will explore every option and take every opportunity to represent credit unions on Capitol Hill in 2013, said CUNA President/CEO Bill Cheney Wednesday as he unveiled CUNA's 2013 legislative priorities.

"It's time to take our substantial 2012 successes and continue to build a great future for credit unions," Cheney declared.

A key issue on CUNA's 2013 legislative priorities agenda is the preservation of the credit union federal tax status. The tax status is likely to be examined this year as the 113th U.S. Congress scrutinizes comprehensive tax reform. (See related story: Cheney identifies CUNA 2013 action agenda.)

Overall, the CUNA legislative agenda this year will have four pillars:  preserving the credit union tax status; reducing regulatory burden; engaging in housing finance reform; and advancing credit union charter enhancements, such as increased member business lending authority and supplemental capital.

The statutory credit union tax status provides credit unions with an exemption from federal income tax because of their cooperative business structure. CUNA and the state credit union leagues are prepared to wage a public advocacy campaign in support of current law. It will encompass a comprehensive and deliberate grassroots, communication and legislative strategy.

CUNA has always maintained that the statutory tax status is as relevant today as it was when granted. In 1917, the U.S. Attorney General--and later the U.S. Congress--exempted credit unions from a federal income tax obligation because of their organization structure: Credit unions are member-owned, not-for-profit financial cooperatives.

The exemption, in effect since credit unions' inception in the United States, has been reaffirmed many times, including in 1935, 1936, 1937, 1951 and 1998.

A second pillar of the CUNA legislative agenda: To address what CUNA has come to call the "crisis of creeping complexity" with respect to regulatory burden.

This is an area in which CUNA had a series of victories in 2012.  Despite the gridlock that gripped Washington throughout the year--right up to and through the "fiscal cliff" negotiations this week--CUNA was able to secure a number of regulatory relief measures. Some examples include:

  • The president signed a CUNA-supported bill into law Dec. 21 that eliminates a duplicative and burdensome requirement that a fee notice be posted on an ATM machine, in addition to the electronic notice that appears on the screen prior to the transaction. The dual requirement had  created legal and financial issues for some credit unions and other financial institutions; and
  •  Signed into law the same day was a CUNA-backed measure (H.R. 4014) intended to ensure that groups or individuals that supply information to the Consumer Financial Protection Bureau (CFPB) would not waive their right to privacy protections.
The remaining two of CUNA's four legislative pillars are engaging in housing finance reform and advancing charter enhancements.

Working with its Housing Finance Reform Task Force, CUNA is prepared to deeply engage with Congress' efforts to reform Fannie Mae and Freddie Mac, expected to be a top priority of House Financial Services Committee Chairman-designate Jeb Hensarling (R-Texas).

CUNA will continue to pursue charter enhancements that improve the operating environment for credit unions. Two major initiatives that remain as priorities from 2012 are supplemental capital and increased member business lending.

For supplemental capital to advance, CUNA and the leagues will continue to educate and generate support for the issue within the credit union system and raise it in the context of Congress' consideration of bank capital issues, such as Basel III rules. 

In 2012 CUNA supported H.R. 3993, which would modify the definition of credit union net worth to include supplemental forms of capital for credit unions. It was referred to the House Financial Services subcommittee on financial institutions and consumer credit for consideration.

CUNA and the leagues also will work to continue progress of legislation in both the House and Senate that would increase the credit union member business lending cap to 27.5% of assets, up from 12.25%. MBL bills (H.R. 1418/S. 2231) enjoyed strong support in both chambers with 145 backers in the House and 22 in the Senate.  

In 2013, CUNA intends to seek the reintroduction of legislation in both chambers to permit experienced credit unions to continue to lend to their small business members. (See related story: CUNA, leagues are active as 113th Congress begins.)


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