Washington old-timers tell me activity in the city used to slow to a crawl during the summer, as everyone escaped the hot and humid weather in search of cooler, drier locations.
In the three years I’ve worked on behalf of credit unions in Washington, that has not been my experience.
In fact, each year the window of any “summer slowdown”—slim as it was already—narrowed. That was especially true this year as three key and explosive issues emerged: interchange, tax reform, and housing finance reform.
Here’s a rundown of what’s happening with each of these issues—and what might lie ahead:
• Interchange. On July 31, U.S. District Court Judge Richard J. Leon handed down his decision to overturn the Federal Reserve’s rules implementing the “Durbin Amendment.” The rules place caps on the amounts financial institutions with more than $10 billion in assets can charge for debit interchange transactions, as well as set requirements for routing and exclusivity of debit card transactions.
During August, we spent a lot of time—along with other financial trade groups—at follow-up hearings in federal court to learn more about the judge’s decision. We filed along with other financial institution groups a “friend of the court” brief outlining our views. And we supported the Fed in requesting an “expedited appeal” of Judge Leon’s decision with the U.S. Court of Appeals —which could take up to a year before it’s heard. Meanwhile, at press time, Judge Leon is considering how long to leave the current rules in place.
CUNA will remain in the thick of any interchange developments, supporting credit union interests.
• Tax reform. In late July, just before lawmakers went on summer break, we conducted our first “Don’t Tax Tuesday” social media blitz. We urged credit unions and their supporters to use Twitter, Facebook, and other social media channels to tell lawmakers “Don’t Tax My Credit Union.” Thousands responded.
Credit unions and leagues followed up in August by attending town hall meetings with lawmakers and holding rallies in support of the credit union tax exemption. The Credit Union Association of New York hosted one such rally, and it drew hundreds.
We welcomed Congress back to Washington early last month when we hosted “Don’t Tax Tuesday” Round Two. Once again, thousands responded by contacting their lawmakers through social media and urging them to keep the credit union tax exemption intact.
Round Two was especially important, as we expect tax reform legislation to emerge from both the Senate and House. Will Congress enact tax reform? That’s unclear. But what’s clear is that lawmakers must hear the credit union voice in support of our tax exemption. Lawmakers must keep our tax exemption intact in any legislation that ultimately emerges.
• Housing finance reform. CUNA was on Capitol Hill throughout the August recess, meeting with staff on housing finance reform. This means resolving the future of Fannie Mae and Freddie Mac, and ensuring financial institutions, especially credit unions, still have access to the mortgage lending market.
Leaders of the Senate Banking Committee and the House Financial Services Committee have strongly indicated their desire to move legislation to the floor this fall.
Reforming the secondary market to ensure a viable housing market is no easy task for Congress. But since this process began, we’ve been meeting with, testifying before, and writing to congressional leaders to ensure they consider credit unions and their members’ needs in this process. We want to ensure a safe and affordable secondary market. We’ll keep at it as this process unfolds this fall.
Summer came and went very quickly. Looks like the pace of activity this fall will be no different.