Recent Advocacy Successes
State Level: Financial Education ½ Credit Requirement
(Support) HB 5190 sponsored by Rep. Diana Farrington (PA 105 of 2022) was enacted to create a new graduation requirement for Michigan highschoolers. Starting with the graduating class of 2024, all high school students will be required to complete a ½ credit of a personal finance/financial literacy course. This requirement is a tremendous step forward as never before has Michigan curriculum required a financial education course be taken to graduate. This will be very impactful and provide students with the tools they need to be confident and successful in managing their finances as they enter the real world and take their next step whatever that may be.
State Level: Appropriation Priorities Funded in FY23 Budget
(Support) On July 1st, the Michigan State House and Senate sent a FY23 budget to the Governor for her signature. Around $76 billion in spending made up the FY23 budget. With additional funds left on the table there are likely to be a supplemental(s) before the end of the year.
Included in this FY23 budget are $2.5 million for the Michigan Saves program. This programs residential arm is entirely done by 8 of our credit unions and provides energy efficiency home loans for members. This funding was one of our FY23 budget priorities and we are very thankful that it was included in the final budget deal.
Another appropriations priority for our team that was included in the FY23 budget was $75 million in funding for Community Development Financial Institutions (CDFI’s) in the state of Michigan. This funding will be awarded based on asset size for CDFI credit unions and MEDC is set to release the grant application in October of 2022. Additional information will be made available to eligible CDFI’s soon.
State Level: Payday Lending Expansion
(Oppose) The MCUL was able to with a coalition of other trade associations and groups successfully oppose HB 4004. The legislation introduced early on in 2021 that would would allow payday lenders in the state to offer a new small dollar installment loan product with an 11% monthly fee and a term of 90 days to 365 days and a dollar amount of up to $2,500. We believe that this product as outlined was extremely harmful and would further trap people in a debt spiral. The legislation was is currently held up in the House Regulatory Reform committee and we at this time do not expect any further movement this session but we will continue to monitor.
Federal Level: Support Commonsense Regulatory Reform
(Support) S. 2155, the Economic Growth, Regulatory Relief and Consumer Protection Act, relieves credit unions and other small community financial institutions of a significant level of regulatory burden. The bill was signed into law (P.L. 115-174) by President Trump on May 24, 2018. For credit unions and small banks with under $10 billion in consolidated assets — every credit union in Michigan — the bill established a safe harbor from certain requirements for a loan to be considered a Qualified Mortgage for purposes of the Ability to Repay Rule, so long as the loan is held in portfolio by the credit union.
The bill also includes changes to HMDA reporting requirements by rescinding the additional data points required under HMDA for insured credit unions that originate fewer than 500 closed-end and/or 500 open-end lines of credit. Section 105 of the bill was included specifically for credit unions and it provides parity between credit unions and banks with regard to 1-4 non-owner-occupied units. The provision allows credit unions to classify loans for these types of properties as residential real estate loans, as banks currently do, rather than business loans.
Below are some additional provisions contained in the bill that are beneficial to credit unions:
- Section 109 removes the three day waiting period required for the combined TILA/RESPA mortgage disclosure if a creditor extends a consumer a second offer of credit with a lower annual percentage rate.
- Section 216 requires the U.S. Treasury to study the risks that cyber threats pose on financial institutions.
- Section 303 provides legal immunity to properly trained financial service employees who disclose concerns about financial exploitation of senior citizens.
- Section 307 addresses long-held concerns about Property Assessed Clean Energy (PACE) loans, primarily that the same consumer protections in place with respect to mortgage lending are nonexistent for PACE loans.
For several years prior to the passage of S. 2155, MCUL and Michigan credit union advocates met with members of the Michigan congressional delegation and their staff to educate them on the impact that burdensome regulations have on credit unions and credit union members — their constituents. These advocacy efforts peaked in the spring of 2018 when credit unions leaders met with members of Congress during the CUNA GAC and requested support for S. 2155. During that period, credit union advocates also sent some 1,700 messages to delegation members, placed calls to their offices and submitted op eds to local media outlets in support of S. 2155.
Federal Level: Protect the Credit Union Not-for-Profit Tax Status
(Support) On December 22, 2017 President Trump signed into law H.R. 1, the Tax Cuts and Jobs Act (P.L. 115-97). The bill made significant changes to the U.S. tax code including lowering tax rates for individuals and corporations. As it pertains to credit unions, MCUL’s primary objective was to ensure language was not included in the bill that would in any way alter the credit union not-for-profit tax status.
the weeks and months leading up to final passage of the bill, MCUL and credit union advocates met with members of the delegation during Hike the Hill, CUNA GAC and at in-district/state meetings to educate them on the credit union difference, the importance of the credit union tax status and to urge legislators to oppose any effort that would change the credit union not-for-profit tax status. addition, all fourteen Michigan members of the House and both of U.S. Senators provided MCUL with statements supporting the tax status.
GSE Investment Authority — DIFS Order
After nearly five months of work by Chuck Holzman, Dow Chemical Employees CU and assistance from MCUL, DIFS Director Pat McPharlin issued Order No. 18-063-CU granting Michigan’s state-chartered credit unions the authority to invest, without limitation, in Fannie Mae, Freddie Mac, FHLB and FCS. The order highlights the following:
- Domestic credit unions may invest, without limitation, in the obligations of Fannie Mae, Freddie Mac, FHLB and entities in the FCS in a safe and sound manner.
- Domestic credit unions do not currently have authority under state or federal law or regulations to invest, without limitation, in the obligations of Fannie Mae, Freddie Mac, FHLB and entities in the FCS.
- Competing providers of financial services already have authority to invest, without limitation, in obligations of Fannie Mae, Freddie Mac, FHLB and entities in the FCS, thereby placing domestic credit unions at a competitive disadvantage if they do not have the same authority.
- Granting this additional authority is appropriate and necessary to enable domestic credit unions at a competitive disadvantage if they do not have the same authority.