Capital Corner: A Guide to 2024, Capitol Hill Edition

Provided by John McKechnie

​Last month I looked ahead at 2024 from a regulator’s perspective—what can defense credit unions expect from NCUA and CFPB? This month I am going to lay out (guess) what Capitol Hill is going to do on credit unions, and what that will mean for your credit union. 

Here are some issues that could be on the Congressional menu in 2024:

Credit Card Competition Act: the so-called “Durbin Amendment” would create price controls on credit card transactions by allowing retailers to use cheaper, less reliable, and less-secure payment rails. It would build on the unworkable Durbin debit caps from 2010, and Senators Richard Durbin (D-IL) and Roger Marshall (R-KS) have introduced legislation to achieve that dubious goal.

That’s the bad news. The good news is that this bad bill appears to have stalled, at least in part because credit unions have told Congress in no uncertain terms that the Durbin bill is NOT pro-consumer, it would degrade data security and privacy.

Merchants continue to press their case—Senator Durbin says he’ll hold a hearing on the issue as a way to inject new life into the moribund bill—but for now the CCCA appears stalled. Continuing vigilance by credit unions will keep things going in the right direction here.

Tax bill: The House Ways and Means Committee passed a tax reform package in January that would extend expiring business tax breaks for business and expand a child tax credit. To the surprise of almost everyone, House Ways and Means Chairman Jason Smith (R-MO) and his Democratic Senate counterpart Ron Wyden (D-OR) agreed on the package before it was introduced. And according to Committee staff involved in the drafting, the credit union tax exemption was never once been discussed by the tax writers during this process.

The House passed the bill 357-70, and the Senate may take it up later this spring. Bottom line: the credit union tax exemption is not part of the conversation— continued vigilance will keep it that way.

Cannabis banking: For the 7th consecutive Congress, a bill allowing credit unions to serve marijuana businesses is in limbo. The Senate Banking Committee approved a bill modeled after a House-passed version… and it promptly ran into trouble when a group of Senators insisted on cannabis decriminalization and other changes.

What breaks the logjam? A legislative solution may not be possible (even though decriminalization advocates signaled they MAY be open to dropping some demands). But it’s rumored that the Biden Administration could re-classify cannabis as a less dangerous drug, opening the door to more lenient legal treatment. Maybe shortly before the November election?

Credit union modernization: A bill was re-introduced to give NCUA authority to examine CUSOs and other credit union vendors. This promises to be controversial—credit unions have never been comfortable with giving the regulator such broad new powers.

Sweeteners may be added to gain support, such as tweaks to the Federal Credit Union Act to modernize board meeting requirements, extend loan maturities and upgrade the Central Liquidity Facility (which would give credit unions improved access in case of a crisis).

These ideas, whether taken individually or as a package, could be something credit unions can get to work on as the year develops.

On the horizon?: Watch for possible hearings in both the House and Senate financial committees on alleged lending discrimination (made in a CNN televised report in December) regarding Navy Federal Credit Union.