What the 2022 Elections Could Mean for Credit Unions

By Greg Mesack, NAFCU SVP of Government Affairs

Greg Mesack, NAFCU SVP of Government Affairs

Advocacy is one of the core missions of NAFCU. We spend every day on Capitol Hill and at the agencies fighting for credit unions. We fight to remove obstacles to growing and serving your members and fight new laws and regulations that could harm credit unions. This is our passion. However, we need your help, because our message is even more amplified when credit union executives and volunteers engage directly with decision makers in Washington, D.C. You can provide support by submitting feedback through comment letters, joining NAFCU meetings with agencies, or visiting with your Member of Congress. As a constituent and voter, your voice matters.

While the past few years have generally been good for credit unions, the risks that policymaking can pose to credit unions is starting to be seen. This is why credit unions, employees, and volunteers need to engage in Washington early, and often.

November 8 is election day and I want to give you some highlights of why this election matters, and why we need to make sure that we elect members of Congress who understand credit unions and the difference you make for main street Americans.

Right now, the White House and Congress are controlled by one party. Having one party control all levers of government can be dangerous for credit unions, whether it is Democrats or Republicans. As the founding fathers recognized, checks and balances are important to our government. When both parties are present, those checks and balances exist and allow us to prevent bad policies from becoming law, while also enabling Congress to have greater oversight of the Executive agencies. Here are two examples from the past year:

  1. IRS Reporting: In the Administration’s effort to find revenue to pay for an ambitious package of social programs, they came up with an idea to close the “tax gap.” This idea would have every bank and credit union in the country report on consumer accounts that receive more than $200 in deposits in a year, virtually every American who has a bank account.

    This would have been an unprecedented violation of Americans’ financial privacy and would have posed an enormous burden on credit unions to track these accounts. Furthermore, it would have placed in the hands of the Treasury Department a tremendous database of information that would be susceptible to cyber criminals, all without any proof that collecting this information would increase government revenues.

    Because of the advocacy of NAFCU and its members, we were able to just barely stop this policy from becoming law. Our grassroots sprang into action. Credit unions and their members reached out to their Senators and Members of Congress to voice their opposition. NAFCU used every tool at its disposal and worked with our champions on Capitol Hill to fight this provision. While we were able to stop it, the idea is not dead.

    This battle over IRS reporting is concrete proof of why election outcomes can be pivotal for the credit union industry. We were only at risk because one party controls all levels of government. Had there been a divided government, the IRS reporting provision would never have had a chance. Electing members of Congress who understand credit unions and the needs of our members allows us to keep bad ideas from becoming law.
  2. CFPB War on Fees: Another example of why elections matter is the recent efforts by the Consumer Financial Protection Bureau (CFPB) to attack credit union non-interest income. With the change in Administration in 2021, came a change in regulators. With the appointment and confirmation of Rohit Chopra as director of the CFPB, the tone, tenor and focus of the Bureau changed dramatically. The CFPB has been aggressively targeting fees, such as overdraft fees, credit card late fees, and a slew of other fees it has inappropriately characterized as “junk fees.” There is no doubt that the CFPB is laying the groundwork to try to use its vast power to limit these fees, which are all permissible under the law and disclosed to consumers upfront under the CFPB’s own rules. The loss of non-interest income could be devastating for many credit unions and the affordable financial products they provide.

    Because Director Chopra is of the same party as those who control Congress, Congressional oversight and legislative pushback to any CFPB overreach of authority will be more difficult. Should the Republican Party regain control of the House in 2022, as many pundits predict, we should expect to see greater CFPB oversight and more pressure on the agency to ensure that it does no harm to credit unions or impede their ability to provide safe, affordable financial services products.

Elections matter, and this election may be one of the most consequential. We need Congress to be strong and stand up to regulators who abuse their authority.

This fall, NAFCU encourages you to get involved. Join NAFCU’s grassroots efforts, engage on the Legislative or Regulatory Committees, learn about the NAFCU/PAC, meet with your member of Congress and, most importantly, vote. If you have questions about your Congressional race, contact the NAFCU Legislative Affairs team. 

NAFCU’s Grassroots Action Center allows credit unions to easily find their polling location, search for local candidates, and more. Take advantage of this resource ahead of the upcoming election by visiting www.nafcu.org/grassroots.