Against the Odds, California CUs Push Through Turbulent 2020

Sacramento capitol building

With one unified voice to state and federal legislators and regulators, credit unions in California continued building “political capital” and winning victories for their members by partnering with the California Credit Union League during a turbulent 2020.

You can click here for a detailed summary of League advocacy, education, training, compliance, information, analysis, news, and a host of other benefits during a year where the COVID-19 pandemic upended society and dramatically impacted the economy and government policies.

As the League continues to provide a unique collaborative system fueling the lifeblood of credit unions, the following “wins” and successes in 2020 on behalf of the entire industry are a direct result of our partnership with member credit unions:

California victories:

MAINTAINED Stability Through Assembly Bill 3088: AB 3088 maintains credit unions’ ability to work with members on mortgage forbearances — a MAJOR VICTORY. The League worked extensively with Governor Gavin Newsom to shape the outcome of AB 3088. The bill does not include any language on foreclosure moratoriums, mandatory forbearance, or long-term eviction moratoriums and was a last-minute compromise out of multiple bills dealing with eviction and forbearance. AB 3088 came after the League battled and defeated AB 1436 and AB 2501.

DEFEATED Assembly Bills 1436 and 2501: AB 1436 moved from one Senate committee to another and was a near repeat of the mortgage forbearance requirements that credit unions had already defeated in AB 2501 in late June. The mortgage provision from then-defeated AB 2501 was dropped into a housing eviction/rent relief bill (AB 1436). Earlier in the year, AB 2501 was introduced after state legislators came back from an unexpected COVID-19 recess and would have let any borrower request a mortgage forbearance for up to 12 months, and up to six months on an auto loan, without any proof of economic impact due to the pandemic. It also included a year-long moratorium on foreclosures, meaning a borrower could go up to two years without making a payment. The League and credit unions rallied together during two intense Connect For The Cause campaigns by sending a total of 21,125 messages to Assemblymembers and Senators to kill AB 2501 and AB 1436!

DEFEATED Senate Bill 561 (2019): Defeated multiple bills that attempted to expand the California Consumer Privacy Act (CCPA), namely SB 561. This measure would have removed the attorney general’s guidance for businesses, as well as the 30-day right to cure, making the entire CCPA subject to private right of action.

PASSED Senate Bill 1121 (2018): SB 1121 clarifies the Gramm-Leach-Bliley Act (GLBA) exemption included in the new CCPA and protects credit unions from large compliance costs related to updating information-technology systems for new consumer notices and opt-out requirements.

ALWAYS REPRESENTING Credit Unions: Consistently working with Assemblymembers and Senators to craft state laws that have a better impact on locally member-owned credit unions as they serve consumers. There is only ONE association in Sacramento that represents your credit union’s voice!

Responding to the COVID-19 pandemic: 

H.R. 748: The CARES Act

  • Federally insured credit unions initially included as eligible lenders in the Paycheck Protection Program (PPP).
  • Expanded the Central Liquidity Facility (CLF) borrowing authority.
  • Credit unions granted Troubled Debt Restructure (TDR) flexibility.
  • Reviving and including credit unions in the Transaction Account Guarantee Program (TAG).

H.R. 266: The CARES Act Supplemental

  • Rep. Susie Lee’s (D-NV) provision to include privately insured credit unions as eligible for PPP lending.
  • Prescribed terms for “second round” of PPP funding ($60 billion for credit unions under $10 billion and $50 billion in assets, respectively).

Orchestrated several letters from Members of Congress to the Administration to resolve unsettled issues:

  • Sept. 18, 2020: Bipartisan coalition led by three California Congressional Members (Garamendi, Speier, and Cook) ensures that the only depository institutions to have rent-free access on military bases are credit unions.
  • Aug. 8, 2020: Nevada House Delegation to House Speaker Nancy Pelosi and Leader Kevin McCarthy requesting extension of the Troubled Debt Restructuring language in The CARES Act.
  • April 3, 2020: Rep. Doug LaMalfa to Treasury Secretary Steven Mnuchin on credit union concerns with PPP applications.
  • April 8, 2020: Rep. Brad Sherman to Federal Reserve Board Chairman Jerome Powell on Regulation D modifications.
  • April 16, 2020: 65 House bipartisan coalition Members to Speaker Nancy Pelosi and Leader Kevin McCarthy on requesting removal of the member business lending cap in future stimulus packages (26 of CA/NV Members signed).
  • April 20, 2020: Rep. Susie Lee (and others) to House Speaker Nancy Pelosi on privately insured credit unions and PPP eligibility.
  • April 28, 2020: Rep. Linda Sanchez to Treasury Secretary Steven Mnuchin on granting payroll tax eligibility for federally chartered credit unions.

CHAMPION of Your Charter — Sought legislation of modernizations to the federal charter from CA and NV Representatives:

  • S. 3389: Sens. Tim Scott and Catherine Cortez Masto — Increasing the maturity cap on non-mortgage related loans.
  • H.R. 5981: Reps. Katie Porter and Mark Amodei — The Credit Union Board Modernization Act.
  • *H.R. 6550 and H.R. 6789 (Reps. Brad Sherman and Maxine Waters) — Safe harbor from the member business lending cap and CLF authority extension.

The League Continues ADVOCATING with Members of Congress and are engaged in The CARES Act, Federal Home Loan Banks, CDFI funds, and COVID-19 liability protections.

Political action:

SUPPORTING the Credit Union Cause: The California League PAC (Political Action Committee) raised more than $399,700 toward state candidates and over $108,600 toward CULAC for federal candidates through individual giving during GAC Sweepstakes, June CULAC Challenge, and ongoing payroll deduction programs. Notably recognized, California took first place in fundraising for GAC Sweepstakes and accounted for 40 percent of the June CULAC Challenge total donations across 50 states.

Fundraisers and District Meetings with Elected Officials: The League’s PAC has interviewed 15 state and federal candidates; attended 24 fundraisers; and hosted 7 in-person and 17 virtual state and federal district meetings, fundraisers and/or check presentations.

Assembly Bill 2501 Grassroots Campaign: To coincide with the lobbying efforts against Assembly Bill 2501, the California League implemented a robust grassroots advocacy campaign to help defeat this harmful proposal. Numerous credit union CEOs, political professionals, and volunteers worked to combat AB 2501 by sending more than 10,400 opposition letters, discussing the issues with legislators and staff through important video-meetings, and by calling both district and capitol offices.

Project Zip Code: This shows the power of credit union members to legislators within their federal and state districts. More than 100 CA credit unions are actively engaged with Project Zip Code.

Volunteer Leadership: 74 CA credit union volunteers are dedicated to educating elected officials and their communities about the credit union difference through the League Volunteer Leadership Committee.

In regulatory advocacy:

LOOKING OUT on Your Behalf: The League closely monitored the plethora of pandemic-related issuances and provided vital information daily to help credit unions stay informed on regulatory actions.

National Credit Union Administration (NCUA): Further delay of the Risk-Based Capital Rule to Jan. 1, 2023 (during this delay the agency will further consider asset securitization, subordinated debt, and a community bank leverage ratio analog); updated appraisal rule for residential real estate loans (increasing the threshold to $400,000); expanded payday alternative loans rule; and a less burdensome final rule for voluntary mergers of federally insured credit unions.

Consumer Financial Protection Bureau (CFPB): Improved the international remittances rules (increasing the safe harbor threshold to 500, allowing continued use of estimates); increased the HMDA reporting thresholds (for closed-end mortgages from 25 to 100; for HELOCS from 25 to 200 after expiration of current temporary threshold of 500 on Jan. 1, 2022); ensured debt collection rulemaking is limited to third-party debt collectors, revocation of the payday lending rule’s underwriting requirements, and the overdraft rulemaking efforts remain on the bureau’s inactive calendar.

Federal Reserve Board (FRB): After years of advocacy work and credit union frustration with the transaction limits under Regulation D, the FRB’s six-per-month limit on convenient transfers from savings deposits was rescinded.

Meeting with Regulators: 2020 (January – June): Facilitated meetings with the NCUA, the CFPB, and the Nevada Financial Institutions Division. 2019: Hosted five exclusive meetings with NCUA and CFPB regulators and League members.

To view the entire “Powerful Impact” report, click here!

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