Advocacy will always be job No. 1 for NAFCU. You’ve likely heard me say this many times, but it’s important to reiterate because it’s true: advocacy is what NAFCU was founded to do—to give credit unions a strong voice in Washington, to fight for what you need.
Direct input from you, our members, is critical in guiding our advocacy. Whether it’s through participation in our committees, conversations on our NAFCU Networks, trends we’re seeing in compliance questions, or one-on-one conversations, we take these insights to Capitol Hill and regulatory agencies to help inform their decisions.
But another important component of gathering your feedback is done through our research products. NAFCU’s research department does more than provide insights into the current state of the economy. Our team regularly surveys our members on top industry issues, and the NAFCU Report on Credit Unions is our most prominent research project each year. NAFCU’s Board of Directors takes this report to its annual meeting at the Federal Reserve to share the latest issues and trends affecting credit unions and detail the impact of Fed actions.
This year alone, several of our monthly surveys have focused on topics that will have consequential impacts on the industry and your 137 million members: credit card late fees and small business lending.
In response to the CFPB’s proposal to drastically reduce the credit card late fee safe harbor to $8, we asked you how this would impact your institutions. The concern was widespread. Seventy-six percent of respondents indicated they’d have to charge a higher interest rate on credit cards—not only for those who pay late, but for everyone. Roughly 60% said they’d have to adjust card reward programs, limit the extension of credit to at-risk borrowers and adjust underwriting standards.
This policy will have significant ramifications on consumers who need access to safe and affordable credit. With the data we collected, we were able to show the CFPB and lawmakers how it will make life harder and more expensive for all Americans, but especially those struggling to make ends meet.
Amid the pandemic, we saw first-hand how important it is for small businesses to have access to capital. The relief provisions to support small business lending kept many of them afloat—and our credit union members said their participation in the Paycheck Protection Program (PPP) helped attract new members. But unfortunately, the normal regulatory environment of small business lending is extremely burdensome. As the CFPB finalized its rulemaking for small business lending data collection, we flagged data showing credit unions choose not to lend to small businesses because of the regulatory burden and complicated processes.
When the NAFCU Board of Directors meets with the Fed later this year, they will be armed with these data points that highlight the strength of the credit union industry, as well as how the industry is held back by decisions in Washington. The same is true for our Government Affairs Team when they have meetings on Capitol Hill and at the White House, NCUA, or other agencies.
These surveys provide invaluable insights into what credit unions are facing, how you’re working to address them, and what NAFCU can do to support you. Data adds credibility and helps policymakers understand our argument. I encourage you to participate in NAFCU’s research—your input is the backbone of our advocacy’s success.
Connect with B. Dan Berger on Twitter, @BDanBerger, and on his blog at www.nafcu.org/berger-leadership-blog.