Capital Corner: Items Moving Through Congress

Provided by John McKechnie

Congress and regulators are moving forward with a list of items on the “to-do” list as the calendar turned to May. It’s accepted wisdom that not much will be done after July in an election year…but we’ll see.

One of the talking points against the retailer-backed Credit Card Competition Act—that airline rewards points would be jeopardized by diminished credit card fees—was the focus of a CFPB forum May 9.

The event, also involving Transportation Secretary Pete Buttigieg, probed airline and credit card rewards programs and featured panelists from Apple Federal Credit Union, and several labor and consumer groups. Federal officials said they were aiming to gain insight about whether more action is needed to control prices.

This session shows the merchants and their congressional allies desperately trying to create momentum around the stalled effort to impose price controls on the credit card market.

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Cannabis banking legislation, a DCUC priority, may have gotten an unexpected path to passage thanks to an unrelated bill regarding the Federal Aviation Administration in early May. House Financial Services Committee leaders Patrick McHenry (R-NC) and Maxine Waters (D-CA) have worked with Senate leaders to insert the SAFER Banking Act into the FAA bill. SAFER will allow credit unions and other federally insured institutions to accept pot business funds. More contentious aspects of the issue, such as full legalization of marijuana, were to be set aside in order to facilitate passage in the Republican-controlled House.

Although the attempt to add financial services language to the aviation bill ultimately failed, there are still possibilities later in the year that other DCUC priorities can be added to another must-pass bill, including:

• Credit union board modernization, which reduces the required number of board meetings from 12 to 6 annually.
• Central Liquidity Facility reform, which facilitates the disbursement of NCUA liquidity by enabling corporate credit unions to serve as agents.

According to Hill sources, NCUA is increasing the decibel level in its call for third party credit union vendor exam authority in legislation prior to Congressional adjournment in December. So that’s another issue on the “watch list.”

DCUC will be actively advocating for credit union priorities in future legislation.

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​DCUC was “firstest with the mostest” promoting credit union interests in rumored privacy legislation. After obtaining an advance copy of the bill from congressional sponsors in late April, DCUC flagged the need for consumer privacy to be enhanced by improved data security.

The day after a DCUC letter went to House and Senate committees, House Financial Services Committee Chairman Patrick McHenry pointed to the need for a financial services angle: “The Financial Services Committee is going to insist on our jurisdiction being respected. There’s an opportunity to link our efforts to update financial data privacy, with greater protections on consumer data protection….I think that would create a greater balance.”

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​Another strong stand by DCUC was prompted by the coming CFPB regulation on credit card late fees. DCUC called for a repeal of the rule in a letter to the House Financial Services Committee before that panel voted to revoke the CFPB rule. The DCUC letter cited increased costs on consumers to offset lost late fee revenue, as well as weakened financial responsibility among servicemembers, as reasons to repeal the regulation.

The Congressional Review Act is the vessel for repeal. It allows Congress to rescind any federal regulation within 60 days of its posting. Both chambers of Congress must pass a “joint resolution of disapproval” and have it signed by the President. While the House is expected to pass the CRA resolution, the Senate probably will not. And if such a resolution reaches President Biden’s desk, he will almost certainly veto it.

​The CFPB late-fee regulation, which is also under federal court challenge in Texas and DC, stands to go into effect May 14.