MCUL 2017ADVOCACY AGENDA
Tier I
Tier I issues include those issues that are “signature” efforts, either proactive or defensive, that will demand attention or that have been brought to MCUL due to an identified need from the credit union community. In almost all cases: these issues are no longer developmental but have been introduced; drafting is completed and introduction is pending; and/or active stakeholder work is underway. These issues have tangible and quantifiable impact potential for credit unions’ financial or operational performance, or from a liability perspective. Issues in Tier I may downgrade depending on activity or potential for passage, and new issues may be added or upgraded into Tier I as activity level or potential for passage rises.
STATE LEGISLATIVEIssue / Type / Primary / Secondary / Position / Status
Expansion of Payday Lending Product Offerings and Authority / Defensive / Hanna
Kingdon
Ross / Bearman
Stevenson / Oppose / Legislation to allow payday lenders to expand their product offerings in Michigan was introduced during the 2015-2016 session. One approach would have allowed payday lenders to operate outside of the consumer protections contained within the Deferred Presentment Services Transaction Act. Another would have allowed payday lenders to offer installment loans of $2,500-$5,000 with effective APRs ranging from 240-280%. Both legislative packages contained few, basic consumer protections. While neither approach was passed by the Legislature last term, MCUL is continuing to educate lawmakers on the adverse effects of any increase in authority for payday lenders.
Loss of Collateral on Abandoned Vehicles and Lienholder Rights / Offensive / Hanna
Kingdon / Bearman / Support / Exploring. In 2016 member credit unions reported they had received delayed and untimely notices that vehicles upon which they had a lien were abandoned. By the time representatives were able to inspect the vehicles to determine if the collateral was worth redeeming, the storage and towing fees had accumulated to more than the value of the collateral.
Electronic Notarization / Offensive / Kingdon / Bearman
Hanna / Support / Exploring. Virginia and Montana do not require that an individual be in the physical presence of a notary public when having a document notarized. Michigan notaries must verify the signature and identity of an individual and the signor must physically be in their presence and all signatures must be an original to obtain notarization. Yet, as society becomes more and more digitized, allowing for electronic notarization would create essential efficiencies in transactions. The ability to conduct transactions totally electronically will create new opportunities by increasing convenience and choice for consumers, opening new markets to consumers, allowing new business models to develop, and decreasing costs. MCUL has been in discussion with the Secretary of State to examine legislation for the 2017 session.
Criminal Conversion in Stripping Foreclosed Homes / Proactive Defense / Hanna
Bearman / Kingdon / Support / Exploring.A Michigan Supreme Court decision held that larceny of fixtures within a foreclosed home could not be committed because Michigan does not have a statutory definition of larceny. Action is necessary in order to ensure that the every aspect of the home is protected during the foreclosure process.
Data Breach / Proactive / Kingdon / Hanna / MCUL is encouraging a state solution for data breaches in the absence of action on retailer accountability for at the federal level.
STATE REGULATORY
Issue / Type / Primary / Secondary / Position / Status
Sample Bylaw Review / Proactive / Ross / Hanna
Stevenson / Support / In process: Workgroup formed. First meeting scheduled for December 13, 2016. Purpose to review, update and modernize the bylaws for state chartered credit unions.
FEDERAL LEGISLATIVE
Issue / Type / Primary / Secondary / Position / Status
CFPB Exemption Authority / Proactive / Ross / Kingdon
Hanna / Support / MCUL supports efforts to encourage the CFPB to use its robust tailoring authority granted by Section 1022(b)(3)(A) of Dodd-Frank and tailor rulemakings to protect credit unions from increased regulatory burden. Last term, letters from both the House and the Senate were sent to the Director and urged such action.
FCUA Modernization / Proactive / Ross / Hanna
Stevenson
Kingdon / Support / To Be Introduced. The MCUL supports a robust update of the Federal Credit Union Act, helping ensure credit unions have the powers to compete in the financial marketplace. A dynamic, dual charter system is extremely important for the future of credit unions.
Tax Reform / Proactive / Hanna / Kingdon
Ross / As President-elect Trump takes office, tax reform could resurface as Speaker Ryan controls the U.S. House. We will need to continue our support for maintaining credit union’s “not-for-profit” tax status in the new Congress.
NCUA Budget Transparency / Proactive / Hanna
Kingdon / Ross / Support / To Be Introduced. As the NCUA is funded by its membership, increased transparency would allow stakeholders to have input in the budgeting process of their prudential regulator.
Member Business Lending / Proactive / Hanna Kingdon / Ross / Support / Legislation was introduced last term to increase the member business lending authority of credit unions from 12.25% to 27.5% of total assets. A bill was also introduced that would treat 1-4 non-owner occupied residential loans the same as they are treated by bank classification (non-MBLs).
CFPB Oversight / Proactive / Hanna
Kingdon / Ross / Support / Legislation was introduced last term that would have created a non-partisan, 5 person oversight board for the CFPB. MCUL expects something similar to be introduced during the 2017-2018 term.
Portfolio Lending Reform / Proactive / Hanna
Kingdon / Ross / Support / Legislation is necessary toamend the Truth in Lending Act to create a safe harbor from lawsuit for creditors that are depository institutions for any failure to comply with certain requirements with respect to a residential mortgage loan, and the banking regulators are required to treat such a loan as a qualified mortgage, if the creditor has, since the loan's origination, held it on its balance sheet and all prepayment penalties with respect to the loan comply with specified limitations.
Data Breach / Proactive / Hanna
Kingdon / Ross / Support / To Be Introduced. Legislation is necessary that requires retailers to implement an information security program and to notify consumers, federal law enforcement, appropriate administrative agencies, payment card networks, and consumer reporting agencies of certain data breaches of unencrypted sensitive information likely to cause identity theft or fraudulent transactions on consumer financial accounts.
Financial CHOICE Act Regulator Relief / Proactive / Hanna
Kingdon / Ross / Support / Last session, credit unions supported several components of Chairman Hensarling’s “Financial Choice Act”, including provisions to expand CFPB oversight, increase exam fairness, NCUA budget transparency, among other regulatory relief provisions. It is likely that Chairman Hensarliing introduces similar legislation in the new Congress.
Federal Regulatory
Issue / Type / Primary / Secondary / Position / Status
NCUA- Examination / Proactive / Stevenson
Ross / Hanna / Pending / Examination initiatives with NCUA including CALL Report modifications, 18 – month examination cycle, Examination Fairness
NCUA – Field of Membership / Proactive / Stevenson
Hanna / Ross / Pending / NCUA has proposed three additional amendments to the Chartering and Field of Membership Manual. MCUL is evaluating to identify potential benefit
CFPB Proposal: Payday Vehicle Title and Certain High-Cost Installment Loans / Proactive
Defensive / Stevenson
Hanna / Ross / Pending / MCUL submitted our comment letter opposing the CFPB’s proposed rule on October 7, 2016. MCUL will continue to monitor for final rulemaking and assess the impact it would have upon credit unions.
CFPB Proposal: Arbitration / Proactive
Defensive / Stevenson
Hanna / Ross / Pending
(Oppose) / MCUL submitted our comment letter to the CFPB on August 22 expressing our opposition to the proposed rule and the impact to credit unions. MCUL is monitoring the Bureau’s actions for a final rule.
CFPB Proposal: Overdraft Protection Programs / Defensive / Stevenson / Ross / Pending
(Oppose) / Currently in Prerule Stage – Also on the CFPB rulemaking agenda for /20162017
CFPB Proposal: Debt Collection / Defensive / Stevenson / Ross / Pending
(Oppose) / Currently in Prerule Stage – Also on the CFPB rulemaking agenda for 2016/2017
Proposal will look at way debt collectors report debts, how disputes are handled and the time period for reporting certain information to the credit reporting agencies. Issue is the CFPB is looking very broadly in terms of debt collection by looking at everything from debt buyers to collectors, first party collectors, and banks (and credit unions) collection for others AND themselves.
Tier II
Tier II contains those issues that are important, but: are not currently active but action is expected this session; will be pushed for after further work is completed or if opportunity is presented; are still somewhat developmental but nearing active status; or in the case of “defensive” or externally generated measures, are not expected to be controversial but still need to be monitored closely or may require minor adjustments.
STATE LEGISLATIVEIssue / Type / Primary / Secondary / Position / Status
Patent Trolling / Proactive / Kingdon / Bearman
Hanna / Support / Patent Assertion Entities operate by purchasing patents and holding them in a portfolio. The patents might come from a variety of sources. PAEs monitor the market for products or processes that could infringe on a patent in its portfolio. When infringement activity is suspected, the entity issues a demand letter requesting that the suspected infringer take a license to avoid being sued. Legislation is needed to prohibit bad-faith assertions of patents.
Bank Tax Relief / Defensive / Kingdon / Bearman
Hanna / Neutral / The Michigan Bankers Association is seeking tax calculation relief for its members. Legislation was introduced last term, passed the Senate, and was referred to the House Financial Services Committee.
PRE on Foreclosed Properties / Proactive / Kingdon / Hanna / Support / Legislation has been introduced for the previous two terms that would allow financial institutions to retain the principal residence exemption on foreclosed properties. MCUL expected similar legislation to be introduced during the 2017-2018 term.
Transportation Network Company Regulation / Defensive / Hanna / Kingdon / Neutral / Regulatoryschemes for services such as Uber and Lyft, overlaying local agreements, is needed. Language was inserted into past legislation that would require the TNC to notify drivers that there could be a gap in insurance coverage.
FEDERAL LEGISLATIVE
Issue / Type / Primary / Secondary / Position / Status
Supplemental Capital / Proactive / Hanna
Kingdon / Ross / Support / MCUL supports any legislation that would allow federal credit unions to receive payments on uninsured, non-share capital accounts, provided the accounts do not alter the cooperative nature of the credit union and are uninsured.
CFPB Oversight / Proactive / Hanna
Kingdon / Ross / Support / Legislation was introduced last term that would have required the Director of the CFPB to create a Small Business Advisory Council and a Credit Union Advisory Council, to provide additional direction and oversight of the new agency. MCUL would support legislation along these lines, if reintroduced.
Federal Regulatory
Issue / Type / Primary / Secondary / Position / Status
ADA Website Compliance / Proactive / Stevenson / Ross / Support / While MCUL anticipates guidance being issued, financial institutions have been sued for failing to have ADA accessible websites and/or documents.
Tier III
Tier III issues are those that are: still fully developmental; of secondary or indeterminate importance from a fiscal or operational standpoint for credit unions; or, in the case of introduced legislation, have little chance of further movement but still need to be monitored.
STATE LEGISLATIVEIssue / Type / Primary / Secondary / Position / Status
Campaign Finance Reform / Proactive / Hanna / Kingdon / Pending / In light of the Citizens decision numerous changes to Michigan’s campaign finance laws should be made. MCUL is closely watching for legislation that will enable credit unions to increase their advocacy efforts and enable our members to continue to promote the credit union difference to lawmakers.
Dower Rights / Kingdon / Hanna
Bearman / Pending / Changes to Michigan’s Dower Rights were examined in the 2015-2016 session and MCUL is involved in a workgroup
Cybersecurity Council / Proactive / Hanna / Kingdon / Support / In Drafting. Creates the Cybersecurity Council within the Department of Technology, Management, and Budget.
Privacy of Financial Information / Defensive / Hanna / Kingdon / Oppose / Legislation was introduced last session that would have prohibited credit unions from disclosing an individual’s nonpublic personal financial information to a third parity without the written informed consent of said individual. It is likely that similar language will be reintroduced.