As medical technology grabbed most of the headlines in 2021, financial technology quietly advanced by leaps and bounds. As we enter 2022, it’s impossible to ignore that a decentralized, digital financial world has taken root, sending green shoots up through the cracks of the traditional financial services industry.
One thing I know for sure: our industry has no reason to be concerned. Credit unions have risen to meet this type of challenge before, and we’ll meet this one, too.
Because credit unions have a rich evolutionary history, NAFCU’s 2022 Advocacy Priorities include a new core goal: opportunities for credit unions to innovate and develop strong technology partnerships.
As consumer life turns increasingly digital, credit unions must innovate to provide the latest products and services. This may require new vendor partnerships, the adoption and development of new technologies or the ability to provide services that support member engagement with and ownership of digital assets.
When evaluating new technologies, NAFCU believes regulators should adopt flexible approaches to avoid stifling innovation and locking credit unions out of the marketplace.
NAFCU’s 2022 Advocacy Priorities also include the following goals:
Growth. NAFCU will continue to promote a growth-friendly environment, which includes unwavering protection of the credit union tax exemption. Some other examples of this advocacy are already at work for the industry: we fervently oppose proposals for direct government lending programs and postal banking, and will continue to work to expand credit union investment options, reform field of membership rules and modernize outdated FCU Act limitations. NAFCU believes that credit unions should have as many opportunities as fintech companies to provide their members with modern financial services, including those that facilitate engagement with digital assets.
Regulatory Relief. Regulatory burden continues to unnecessarily stunt credit union growth and service. NAFCU supports regulatory reform that includes appropriately tailored rules backed by cost-benefit analysis and enforced by a three-member NCUA Board as the primary regulator of all credit unions. We also continue to advocate that enforcement orders from regulators not take the place of regulation or agency guidance. NAFCU hopes to foster a regulatory environment that promotes healthy competition and responsible innovation.
Fair Market. NAFCU believes reform is also needed to ensure all lenders, payments providers, depository institutions and other financial services providers operate on a level playing field and follow the same rules of the road. In 2021, NAFCU pushed back against a sudden expansion in fintech chartering activity because many of the critical policy decisions related to such chartering had been the product of opaque deliberations within the OCC.
Data Protection. In our increasingly digital world, federal standards for data privacy and data security are essential. The cumulative toll of data breaches affecting merchants, credit bureaus and social media companies has yielded an enormous volume of personal information for cyber criminals to craft into convincing social engineering attacks. As the CFPB contemplates a future rulemaking to facilitate consumer data portability in an age of mobile banking, the data security standards which apply to credit unions must also be extended to fintechs and data aggregators to ensure that sensitive, consumer information is adequately protected.
Credit unions have served their members through war, social unrest, financial crises, economic recessions and countless technology challenges. We’ll continue to serve as a bastion of financial inclusion and available credit, whatever may come, because people helping people is universal.
For more on NAFCU’s 2022 Advocacy Priorities, go to www.nafcu.org/priorities. Tom DeWitt is president and CEO of State Farm Federal Credit Union in Bloomington, IL.