Legislative and regulatory advocacy have long been a part of CUNA’s efforts.
But in the past few years, CUNA has deployed its legal advocacy efforts both to defend important credit union priorities and to go on the offensive to ensure credit unions receive recompense when they are harmed due to other parties’ negligence.
NCUA finalized its member business lending (MBL) rule in 2016, providing regulatory relief by eliminating most requirements not present in the Federal Credit Union Act. In response, the Independent Community Bankers of America sued the agency.
CUNA, which strongly supports the MBL rule, filed an amicus brief in the case arguing that NCUA was well within its authority to issue the rule.
Within two months, the U.S. District Court of the Eastern District of Virginia granted NCUA’s motion to dismiss the lawsuit.
In its decision, the court said it dismissed the suit on procedural grounds, but also indicated it would have dismissed the suits on its merits.
While defending credit unions’ ability to offer loans to business members, CUNA also went on the offensive in the wake of data breaches that left credit unions scrambling to replace compromised cards at their own cost, despite doing nothing wrong.
A 2014 Home Depot data breach left credit unions facing $60 million in costs to replace 7.2 million payment cards, according to data compiled by CUNA, which joined in a class action lawsuit against Home Depot.
“Credit unions faced significant costs in replacing payment cards that were compromised due to Home Depot’s negligence,” says Susan Parisi, CUNA’s chief counsel. “We felt it was incumbent upon us to stand up with credit unions, pursue every avenue to get merchants to raise their security standards, and give credit unions some financial relief relating to those costs.”
Eventually, the sides reached a settlement that led Home Depot to create a $25 million settlement fund and agree to strengthen its future data security measures. CUNA and state credit union leagues demanded the latter agreement throughout the case.
Payments from Home Depot to credit unions began in January.
When it comes to reimbursing credit unions, CUNA also ensured credit unions started receiving rebates as NCUA considered closing the Temporary Corporate Credit Union Stabilization Fund.
The agency created the fund to guide the credit union system through the worst of the financial crisis.
In the summer of 2017, NCUA indicated it was considering closing the fund and merging it with the National Credit Union Share Insurance Fund.
Such a merger meant credit unions who paid into the fund would start receiving rebates.
CUNA was the only national trade association for credit unions pushing NCUA to close the fund and start issuing rebates as soon as possible. More than 90% of commenting credit unions backed CUNA’s position.
“Simply put, we believed that the money paid into the stabilization fund would be much better served back with credit unions where it could be used to serve members, rather than sitting in an NCUA bank account,” says Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer.
The NCUA Board closed the fund Oct. 1, 2017, using the closing balance as of Sept. 30. Rebates started this year.
“We had a good year last year, and we’re set up for an even better year in 2018,” Donovan says. “Our advocacy agenda was built from the ground up with input from leagues and credit unions around the country, so we know we’re focused on the issues that will make the biggest difference.
“Credit unions and their members expect big things this year,” he adds, “and we’re going to stay on the offensive.”