SPECIAL COVERAGE: HIKE-THE-HILL SEPTEMBER 2019
Hikers Set the Pace for Advocacy
The Cooperative Credit Union Association (Association) hosted its members in Washington, D.C. September 18-19 as part of its annual Hike-the-Hill event. More than 40 Association credit union professionals and volunteers, led by CCUA President/CEO Ron McLean, joined with fellow Hikers from the Kentucky Credit Union League at our ‘home away from home’ – Credit Union House – for a legislative update from CUNA staff and a meeting with representatives from the Consumer Financial Protection Bureau (CFPB).
The CFPB provides financial education for consumers in a myriad of ways, with many resources available at no charge to credit unions, including booklets, brochures and other handouts on elder financial fraud and scams. Videos and podcast, as well as Facebook posts, are additional resources that credit unions are encouraged to share with their members and the CFPB is researching the possibility of integrating credit union ChatBots with their data. The CFPB plans to launch a savings initiative to educate consumers on the importance of savings. McLean issued a standing invitation to the CFPB to participate in a roundtable with Association members for input and feedback on its rulemaking.
Another round of legislative updates took place inside the Capitol as the group gathered before embarking on Hill Visits with their lawmakers. McLean welcomed the group and stressed the importance of maintaining and enriching relationships with their elected officials ‘in district’ and at their own credit unions.
Eli Joseph, Deputy Chief Advocacy Officer for Congressional Relations at CUNA, gave the group additional insight into legislative issues. As Joseph noted, many credit unions serve our military, and Section 2821 of the Senate version of the NDAA would allow other financial institutions to provide services on military installations. The House version does not include such a provision. As the bill goes into conference, credit unions were reminded to urge their delegation to remove the provision as for-profit financial institutions do not have the best interests of our military at heart.
For credit unions, cannabis banking continues to exist in a grey area. Although many states have legalized cannabis, for federally regulated credit unions it remains to be an illegal activity. Joseph noted the Safe Banking Act may come into the House under ‘suspension of the rules’ – meaning there would be no amendments, but that a 2/3 vote would be required to pass it – and therefore every affirmative vote counts.
After the conclusion of the briefing and a quick lunch, hikers from Delaware, Massachusetts, New Hampshire, and Rhode Island held meetings with members from both Houses of Congress.
Hill Visit Highlights
Rhode Island Senator Jack Reed
Senator Reed continues his support of credit unions and has played an active role on their behalf in support of and ensuring fairness within the pending Fiscal Year 2020 National Defense Authorization Act relative to military leases. On the issue of data privacy/security, a significant stumbling block remains in the many committees with overlapping jurisdiction over the topic: banking; energy, commerce; and intelligence. The group noted that the first new U.S. payment system in decades is coming, and it aims to dramatically simplify processes from transaction initiation through to reconciliation. Pivotal to this is the way Real-Time Payments combines immediate funds availability, settlement finality, instant confirmation, and integrated information flows all within a payment made in seconds. Bringing together speed, data, and communication solves for longstanding challenges and the Federal Reserve is moving forward. Rhode Island consumers well understand the need for and the benefits of timely check clearing. Other topics discussed included Equifax, housing finance reform, cannabis banking, pay day lending, climate change, and federal loan limits.
Massachusetts Senator Edward Markey
After discussing issues such as bank secrecy act and anti-money laundering reform, data privacy and housing finance reform, credit union attendees expressed appreciation for Senator Markey’s leadership in supporting S. 1200, which provides a safe harbor for credit unions who accept deposits from, extend credit to, or provide payment services to entities engaged in marijuana-related commerce where such activity is legal. It also provides that credit unions filing SARs related to transactions by a cannabis-related business shall comply with guidance issued by FinCEN. Also, Senator Markey has supported recently proposed housing legislation.
Massachusetts Congresswoman Lori Trahan
Congresswoman Trahan, another new member of the Massachusetts Congressional Delegation, proudly informed her constituents that she has been named by House Leadership to serve on the House-Senate conference committee to resolve the differences in the Fiscal Year 2020 National Defense Authorization Act. The Federal Credit Union Act grants the Department of Defense discretionary authority to waive the cost of credit union land leases to credit unions whose field-of-membership is composed of least 95% military personnel, federal employees, or their families. An amendment was offered before the House Armed Services Committee to extend to banks the same rent-free access to land and facilities, which was defeated. The Senate version of the legislation maintains the language granting banks rent-free access to land and facilities. Her service is very important to credit unions, who support the House version of the bill. In meeting with her constituents, Congresswoman Trahan expressed appreciation for the work that credit unions do in communities. She remarked that she is looking for ways to be further supportive on issues of mutual interest in the future.
Delaware Senator Thomas Carper
Delaware’s senior Senator, Thomas Carper, made time in his busy schedule to meet with Delaware credit union professionals. He cordially greeted the group and then queried, “what do you want to tell me?” The Senator was reminded of how credit unions stepped up for government workers during the last government shutdown and urged the Senator to vote in favor of credit unions when Section 2821 of the NDAA was brought to conference. The group shared stories of the upcoming impact of CECL on credit unions of all sizes, as well as the impact of healthcare insurance costs on both credit unions and their employees.
Massachusetts Congressman Jim McGovern
As regards to cannabis banking, Congressman McGovern was thanked by credit unions for his support of and efforts towards moving H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act, forward. In addition to being a bill sponsor, as Chairman of the House Rules Committee, McGovern is committed to bringing the bill up to the floor under suspension of the rules in the next few weeks. The bill if passed would provide a safe harbor for credit unions who accept deposits from, extend credit to, or provide payment services to entities engaged in marijuana-related commerce where such activity is legal.
Massachusetts Congressman Joseph Kennedy, III
Staff for Congressman Joseph Kennedy, III was briefed on the topic of reporting requirements under the Bank Secrecy Act/Anti-Money Laundering statutory framework and the need for updates. Credit unions discussed appropriate possible thresholds and addressed the cost benefit analysis of the volume of reports combined with the costs to credit unions in employees’ time, among other costs. In doing so, they emphasized the need for a thorough report on the usefulness of Currency Transaction Reports and Suspicious Activity Reports under current thresholds and reporting requirements in general. Credit unions remain committed to collaborating with all parties, including law enforcement, in the detection and prevention of money laundering.
Advocacy Reception Tops Off Successful Hike-the-Hill
Following a full complement of robust Capitol Hill meetings, credit unions continued their advocacy at the Association’s reception held at Credit Union House. The event was attended by member credit unions from each state.
Credit Union House is a stately townhouse in Washington, DC owned by every statewide credit union trade association. It was built primarily for credit unions and credit union groups across the country as a coordination center on Capitol Hill. The legislative environment today demands that credit unions remain vigilant and fully engaged in the democratic process. It is at Credit Union House that credit union representatives gather to plan meetings with lawmakers, construct legislative strategies, and share feedback from visits with key legislative contacts.
Clockwise from Upper Left:
Ron McLean, President/CEO, Cooperative Credit Union Association, Inc. and Julie Siegel, Senior Counsel for Economic Policy, Senator Elizabeth Warren.
Jamila Smith, Member Solutions Partner, Dover FCU; Jim Green, Vice-Chair, American Spirit FCU; Congresswoman Lis Blunt Rochester; Martha Kendall, Director, American Spirit FCU; Glenda Krause, MRC Clerk, Dover FCU; and Association President/CEO Ron McLean.
Jan Raymond, EVP/Chief Lending Officer, St. Mary’s Bank; Ken Senus, EVP/COO, St. Mary’s Bank; and Travis Krogman (right), Legislative Director, Congresswoman Ann Kuster
George Charette, President/CEO, Pawtucket CU; Fred Reinhardt, President/CEO, Greenwood CU; Congressman David Cicilline; Robert Falso, EVP/CFO, Westerly Community CU; Randall Sacilotto, VP/Community Development, Navigant CU; and Association President/CEO Ron McLean.
A. Scott MacKnight, President/CEO, Triangle CU; Ken Senus, EVP/COO, St Mary’s Bank; Congressman Chris Pappas; David Araujo, President/CEO, Service CU; John Ziemba, SVP/Commercial Lending, Triangle CU; and Robert Drouin, VP/Controller, Service CU.
Congressional guests attending included Senator Sheldon Whitehouse and his Legislative Counsel Ches Garrison; Congressman David Cicilline; Congresswoman Lisa Blunt Rochester; Congressman Chris Pappas; Julie Brinn Siegel, Senior Counsel for Economic Policy, representing Senator Elizabeth Warren; Robert Henson, Economic Legislative Assistant, representing Senator Jeanne Shaheen; Travis Krogman, Legislative Director, representing Congresswoman Ann Kuster; and Jay Weismuller, Policy Advisor for Tax and Innovation, representing Senator Hassan.
Special industry guests joining the reception included Brad Miller, Executive Director, American Association of Credit Union Leagues, and several members of CUNA’s legislative, state and political affairs teams.
Special efforts to join credit unions at the reception were also made by Senator Chris Coons and Congressman Jim Langevin, who had last minute schedule changes.
Clockwise from Top Left:
Ken Senus, EVP/COO, St. Mary’s Bank; Congressman Chris Pappas; and John Ziemba, SVP/Commercial Lending; St. Mary’s Bank.
David Araujo, President/CEO, Service Credit Union; Robert Drouin, VP/Controller, Service Credit Union; and Robert Henson, Economic Legislative Assistant, Senator Jeanne Shaheen.
Ron McLean, Association President/CEO and Sue McCue, Director, Credit Union House.
John Howard, President/CEO, Merrimack Valley Credit Union; Randy Sacilotto, Vice President, Community Development; Rhode Island Senator Sheldon Whitehouse; George Charette, President/CEO, Pawtucket Credit Union; Fred Reinhardt, President/CEO; and Bob Falso, EVP/CFO, Westerly Community Credit Union.
James Regan, President/CEO, Digital Federal Credit Union and Julie Siegel, Senior Counsel for Economic Policy, Senator Elizabeth Warren
NCUA Board Meetings with the Cooperative Credit Union Association
The Association concluded its Hike-the-Hill grassroots program with direct meetings in the Filene Boardroom of the National Credit Union Administration (“NCUA”) with members of its Board. Regulatory advocacy remains a priority and discussions at NCUA headquarters are most impactful lending a direct voice with Board members, especially valuable following the consolidation of regional offices.
NCUA Chairman Rodney Hood
The Association's second member meeting with NCUA Chairman Rodney Hood took place shortly after the conclusion of the September Board meeting which featured an unusually large audience comprised of several leagues across the country and other interested observers. Joining the dialogue with the Association were credit union officials representing the Kentucky Credit Union League.
Chairman Hood opened the discussion by reiterating his “People Helping People” philosophy and outlining issues that the Board is working on as evidence of his promised goals and ongoing service and commitment to a vibrant system of cooperative credit. Chairman Hood strongly believes in effective, not excessive, regulation. He provided updates on the following issues:
According to Chairman Hood, cybersecurity is the one issue that can wreak havoc on the broad economy, such as the impact of the Capital One situation, and everyone is vulnerable. Chairman Hood stated he is dedicating new resources to the issue and has hired an expert in cyber hygiene, Johnny Davis, Jr., as Special Advisor to the Chairman for Cybersecurity. He will provide not only strategic counsel on cybersecurity policy, but also engage with other federal financial institutions regulators and external stakeholders. Also, October is Cybersecurity month and NCUA will be active in promoting best practices and other information to keep Boards of Directors engaged to respond to attacks. Additional public relations efforts are forthcoming in this area.
SARs and CTRs
In response to an attendee question, Chairman Hood updated the group on his recent conversations with FinCEN and other law enforcement agencies such as the Secret Service and Homeland Security, as part of his role as Vice chairman of the Federal Financial Institutions Council. He shared that the results of filings by 6 credit unions alone recently led to the investigation and conviction of bad actors. He also reminded the group that the biggest compliance request from law enforcement is a clear, concise narrative in the required reports.
Association President/CEO Ron McLean raised two important issues which were welcomed by Chairman Hood: housing finance reform and CECL. With respect to housing finance reform, Chairman Hood stated that he has engaged Mark Calabria, Director of the Federal Housing Finance Agency, recently to ensure access to the secondary market for credit unions and to address other issues impacting liquidity. Regarding CECL, Chairman Hood reminded the group of the recent breakthrough legal determination by the agency to permit it to phase-in the effects of FASB’s new accounting standard on credit union net worth ratios.
Other issues discussed with Chairman Hood included low income credit union resources, one-third review of regulations, hemp banking, member business loans, pay day loans, and financial literacy.
(l-r): Association President/CEO Ron McLean; Fred Reinhardt, President/CEO, Greenwood Credit Union; John Howard, President/CEO, Merrimack Valley Credit Union; Robert Drouin, VP/Controller, Service Credit Union; Robert Cashman, CEO, Metro Credit Union; Carole Langiu, Director of Communications and Governmental Affairs, CCUA; Cathy Boucher, EVP, Boston Firefighters Credit Union; NCUA Chairman Rodney Hood; John B. Winne, CEO, Boston Firefighters Credit Union; A. Scott MacKnight, President/CEO, Triangle Credit Union; George Charette, President/CEO, Pawtucket Credit Union; Ken Senus, EVP/COO, St. Mary's Bank; John Ziemba, SVP/Commercial Lending, Triangle Credit Union; and David Araujo, CEO/President, Service Credit Union.
NCUA Board Member Todd Harper
Immediately following the dialogue with Chairman Hood, Association members met with the newest member of the NCUA Board, Todd Harper who welcomed the group, acknowledged that he has the best public service job, and reminisced that he previously resided in Dorchester, Massachusetts. He shared with the group his regulatory philosophy and priorities which he described as FIIRE:
• Fairness in applying the law; forward looking, prudent risk;
• Innovation as the industry changes;
• Independent agency, not part of the political spectrum;
• Risk focus; act expediently to protect the insurance fund; and
• Effective and efficient regulation.
During the question and answer portion, Association President/CEO Ron McLean inquired about progress on extended examination cycles and the use of technology for less intrusive off-site monitoring. An extensive dialogue followed, and Board Member Harper shared his vision of a modern examination process: off-site monitoring, sensory data strategies, and a targeted, risk based examination focus. NCUA has accomplished what it could do within existing policies and procedures so the adoption of a new platform is underway, referred to as MERIT, the modern examination and risk identification tool. After a pilot program, it is expected to have broader use in late 2020 and provide more intelligence information to NCUA about how it conducts its examination process. It also replaces AIRES, a legacy examination program over 20 years old. He did note that the agency will always still need to be on site at some level.
During the meeting, attendees also raised questions about the coordination of joint examinations between state and federal agencies and plans to align on site examinations, such as in the area of information technology, to reduce duplication of requests for information and reviews. Attendees noted that a disconnect exists between state and federal examinations. Board Member Harper described his role as part ombudsman with state regulators and therefore, has a responsibility to have conversations with regulators on an ongoing basis to address such situations.
Other Association members inquired about another of Board Member Harper’s priorities, consumer protection. Consumer protection, and more specifically the scope of consumer protection examinations, remains one of his hallmark issues. He stated that he has observed that credit union compliance with the Servicemembers’ Civil Relief Act has slipped, and questioned the extent of the decision making by directors and management in assessing overdraft fees in certain circumstances. Board Member Harper believes that the NCUA has an obligation to help prepare credit unions as they ramp up to asset levels rendering them subject to the the jurisdiction of the Consumer Financial Protection Bureau.
Other issues discussed with Board Member Harper included cybersecurity and transformation of the automated assessment tool, vendor examination authority, pilot examination programs including those for alternating lead examining agencies.
(l-r): Association President/CEO Ron McLean; Fred Reinhardt, President/CEO, Greenwood Credit Union; John Howard, President/CEO, Merrimack Valley Credit Union; Robert Drouin, VP/Controller, Service Credit Union; Robert Cashman, CEO, Metro Credit Union; John B. Winne, CEO, Boston Firefighters Credit Union; Carole Langiu, Director of Communictaions and Gvernmental Affairs, CCUA; Cathy Boucher, EVP, Boston Firefighters Credit Union; NCUA Board Member Todd Harper; A. Scott MacKnight, President/CEO, Triangle Credit Union; George Charette, President/CEO, Pawtucket Credit Union; John Ziemba, SVP/Commercial Lending, Triangle Credit Union; Jan Raymond, EVP/Chief Lending Officer, St. Mary’s Bank; Ken Senus, EVP/COO, St. Mary’s Bank; and David Araujo, CEO/President, Service Credit Union.
NCUA Board Member J. Mark McWatters had a meeting conflict and regrettably was unable to meet with Association credit union officials while at the agency. Please forward any questions or concerns about these discussions to email@example.com.« RETURN TO ALL NEWS