Senate Banking Chairman Endorses CLF, Third-Party Vendor Bills

The Senate Banking Committee Chairman endorsed two bills being pushed by the NCUA, one on the agency's CLF and the other on third-party vendors. Learn why.

David Baumann

Published

Mar 2

2023

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NCUA has pushed Congress to act on both fronts, in one case at odds with credit union trade groups.

Senate Banking Committee Chairman Sen. Sherrod Brown, D-Ohio, on Wednesday endorsed legislation to restore pandemic-related changes to the NCUA Central Liquidity Facility and a bill that would give the agency supervisory power over credit union third-party servicers.

Brown, whose committee has jurisdiction over the NCUA, announced his support while speaking during the final day of CUNA’s Governmental Affairs Conference.

Central Liquidity Facility Bill

The CLF legislation would allow credit unions to purchase CLF capital stock for specific members for the next three years. The bill, S. 544, was introduced on Tuesday by Sens. Alex Padilla, D-Calif., and Kevin Cramer, R-N.D.

“Senator Padilla and other members of Congress who support this crucial legislation realize that extending agent membership in the Central Liquidity Facility is a liquidity lifeline for thousands of credit unions across our nation—especially smaller cooperatives that have a harder time navigating cost-effective funds,” said Diana Dykstra, president/CEO of the California and Nevada Credit Union Leagues.

House Financial Services Committee ranking Democrat Rep. Maxine Waters, D-Calif., also spoke at GAC and said she supported similar legislation last year, but blamed Senate Republicans for blocking it.

Third-Party Vendor Legislation

The third-party vendor bill was attached to House must-pass legislation last year, but was dropped by the Senate. It is supported by the three members of the NCUA board, however is opposed by credit union trade groups.

Continued Republican Criticism of CFPB

Brown and Waters were among several lawmakers who spoke at GAC on Wednesday.

House Financial Services Committee member Rep. Blaine Luetkemeyer, R-Mo., continued the ongoing GOP criticism of CFPB Director Rohit Chopra and the Biden Administration’s regulatory agenda.

He accused the administration of allowing regulators to reinterpret laws and rules to regulate such areas as overdraft fees. “These guys are going to see how far they can push you,” he said, telling those in attendance, “They don’t like business. They don’t like you.”

Marijuana Banking/Member Business Lending Cap

On another issue of concern to attendees, Sen. Tina Smith, D-Minn., revealed she is optimistic that marijuana banking legislation will be enacted this year. “We came close to it last year,” she said, in discussing the bill, which would provide a regulatory safe harbor for financial institutions that serve marijuana-related businesses in states where cannabis is legal.

Also, this week, Sens. Mazie Hirono, D-HI, and Dan Sullivan, R-AK, introduced legislation that would exempt credit union loans made to veteran-owned businesses from the member business lending cap.

CUNA President/CEO Jim Nussle said the credit union group supports that bill, S. 539.

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