Hike the Hill: Michigan CUs Discuss Industry Issues with Regulatory Agencies, Lawmakers (Misc News: May 12, 2014)
WASHINGTON – Credit union leaders returned from two days in the nation’s capital, reinforcing the credit union message with the Michigan’s congressional delegation, FinCEN and the CFPB during the 2014 Hike the Hill event.
Twenty-nine credit union leaders and six MCUL & Affiliates staff went to Washington for the annual grassroots event. Several attendees had never attended one of the MCUL’s lobbying trips before. On day one, the group met with Financial Crimes Enforcement Network and the CFPB to discuss their concerns over new regulations and new rulings that are burdening the industry. Additionally, on day two the group was able to meet with someone from each lawmaker’s office, with several actually meeting with the member themselves. The group was able to meet with all of the Michigan members of the House Financial Services Committee.
As the agency that creates the rules for and enforces the Bank Secrecy Act, FinCEN Deputy Director Fred Reynolds offered input on a variety of issues facing credit unions. Laws and rules regarding marijuana rules have been cause for concern as states legalize some aspects of marijuana distribution and use. Michigan is among several states that have legalized marijuana for medicinal purposes, but two states, Colorado and Washington, have legalized marijuana for recreational use as well.
Problems arise for financial institutions when legal businesses serving the marijuana market want to open bank and credit union accounts. The question is how can a credit union open a business account for a company that violates federal law and many state laws?
Reynolds said credit unions should do their due diligence if want to offer banking services to a marijuana dispensary. He added that the guidance provides red flags.
Reynolds said FinCen has contributed greatly to federal prosecutions using BSA data. He said more than 70 percent of all federal prosecutions use BSA data and the rate is even higher for terror cases.
Bitcoin, the emerging web-based virtual currency is still small, but growing in importance. He said that last year bitcoin had $8 billion in transactions, compared to $81 billion transacted by Western Union, $141 billion by PayPal and $244 billion by Bank of America.
He said the network is treating bitcoin and hundreds of other emerging virtual currencies as a money service business.
Reynolds also encouraged credit unions to reach out to FinCEN with any feedback or questions that they may have. Contact FinCEN at (800) 767-2825 or Frc@fincen.gov.
CFPB Deputy Assistant Director Elizabeth Ellis addressed the group during lunch and gave credit union officials an opportunity to discuss the impact of CFPB rules on international remittance transfers and qualified mortgages. Tuesday concluded with a reception at the Credit Union House with special guest U.S. Rep. Tim Walberg.
At every Hill visit, credit union leaders were able to address important federal issues, such as GSE reform, regulatory reform, data security and liability, member business lending and thank members of the Michigan delegation for their support for the credit union tax exemption. Each meeting gave credit union leaders the chance to talk about their concern about the NCUA’s Risk Based Capital proposal and request that the member sign on to King-Meeks RiskbBased Capital letter. Ten of Michigan’s House members are signatories on the letter: Reps. Justin Amash, Dan Benishek, Kerry Bentivolio, John Conyers, Bill Huizenga, Dan Kildee, Candice Miller, Gary Peters, Fred Upton and Tim Walberg.
The members of MCUL & Affiliates’ Hike the Hill contingent also met with Rep. Dave Camp, R-Midland, and thanked him for his work in protecting the credit union tax exemption. Camp, chairman of the chief tax-writing committee in the House, issued a draft tax proposal that left the credit union tax exemption intact.
Conyers told Michigan’s credit union representatives that he appreciated their regular contact with his office and him personally. He said that he loves credit unions and appreciated their “stepping up for small business when Michigan was on the ropes.”
Kildee sought credit unions’ input on several bills in markup that day. MCUL is working with him on an amendment to help credit unions have their mortgage loans automatically convert to qualified mortgages if they are in portfolio for at least three years. Kildee asked for credit unions’ help in crafting the amendment to protect credit unions but also ensure that big Wall Street banks can't use the authority to harm consumers.
The group also met with Maureen Moody and Seth Hanlon, aides to Sen. Debbie Stabenow, where they discussed a wide variety of issues including CFPB, regulatory relief and retailer data breaches. They expressed their thanks to the senator for her strong support of credit unions and the tax exemption.
Benishek told credit union leaders that he is very interested in supporting regulatory relief measures.