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Michigan Credit Union League

Recent Advocacy Successes

State Level: COVID-19 Employer Liability Limitations

(Support) On October 14th, 2020 legislation strongly supported by the Michigan Credit Union League and a coalition of more than 40 other trade associations and business groups was passed in the state legislature, aiming to protect employers from liability during the COVID-19 pandemic. House Bills 6030-6032 and 6101 would, among other provisions, grant immunity to a business from liability for a contraction of COVID-19 if the entity complied with all federal, state and local requirements and standards. The legislation is retroactive so businesses would be covered from March 1, 2020 going forward. Also including in the legislation is a provision in the event that there is a de minimis deviation from strict compliance with the previously mentioned guidance, the employer would still be afforded some protections. “MCUL has been proud to be part of a coalition of pro-business associations fighting for the liability protection and immunity in this difficult COVID environment,” said MCUL CEO Dave Adams. The legislation was signed on October 22nd by the Governor (PAs 236-239 of 2020).

State Level: Criminal Justice Reform (Expunction)

(Support) The Michigan Credit Union League in addition to a number of other businesses joined in a coalition to assist with meaningful criminal justice reform as it relates to expunction of crimes (Public Acts 187-193 of 2020). Our team felt in necessary to join in the coalition to ensure that the Michigan financial services industry had a seat at the table. Our team worked to ensure that under this package citizens of Michigan had the opportunity to have low level crimes expunged from their record automatically after a period of time as long as a number of criteria is also met. This will allow many Michigan citizens to be able to seek additional employment opportunities and begin to build a strong foundation for themselves and their families. Our team worked to ensure that the legislation did not include certain offenses specific to financial institutions as those that are available for automatic expungement. These types of crimes including crimes of character, financial crimes and others are still available to be expunged however, they must be done through the traditional measures. The legislation also has adequate protections in place for employers as it relates to hiring. Our team is extremely pleased to have been a partner in this legislation and having a hand in making Michigan one of the leaders in criminal justice reform of this kind.

State Level: Appropriations Wins for FY21

(Support) The Michigan Credit Union League is very pleased to share that two of our budget priorities were included in the signed FY21 budget. The first of these two priorities being funding for e-recording process upgrades for counties who do not currently e-record property document or who’s systems need upgrades. Our team was able to secure $600,000 in funding for this project. We look forward to working with the department on this effort. We also were able to secure $1 million in funding for the Michigan Saves program. The Michigan Saves program has a number of credit union partners who are offering energy efficiency loans to their members utilizing this program. We are extremely pleased that both of these priorities were included despite the deficit.

State Level: Escheats of Military Accounts

(Support) During conversations with multiple credit unions, it was brought to our attention that the DOD database does not allow credit unions to see if their members are active duty overseas military members. Verifying status is important in determining when to escheat funds in a dormant account to the state. If a member is active duty overseas military, the credit union is able to hold the funds in a dormant account for an additional two-year period (five years total). However, because our credit unions are unable to verify if a member is overseas or not, it becomes impossible to determine whether to hold the funds or escheat them to the state. Senator Tom Barrett introduced SB 125, which will remedy this situation and provide for a uniform period of dormancy of five years prior to the escheating of funds for all active duty military regardless of whether they are overseas or stationed stateside. The legislation was voted unanimously out of the Senate Families, Seniors and Veterans Committee and off the Senate floor 34-4. The legislation was voted out of both House Military, Veterans and Homeland Security and House Ways and Means unanimously. Before being passed off the House floor 92-0-18 and concurred in by the Senate 37-0-1. The legislation has been signed by the Governor and is now PA 79 of 2020.

State Level: Campaign Finance Reform

(Support) Michigan’s laws and regulations surrounding campaign finance and political fundraising are in need of modernization, and the legislature has undertaken a series of comprehensive bills over the past several sessions to update them in various areas. This session, a bill was launched that provided beneficial amendments making low-dollar, grassroots fundraising more accessible. Among other common sense reforms, like expressly allowing credit and debit card transactions, the bill expressly facilitated collection and transfer of contributions by membership groups through non-individual members like credit unions, and raised the amount that a connected organization can pay for incentive items like lapel pins, bracelets, etc., in return for increased transparency. Postage costs for such items will now be separated from item costs as well, and payable as support, eliminating a growing hurdle for shipping and mailing them. Rep. Julie Calley is the primary sponsor of the bill (HB 4446). This legislation was signed by the Governor on October 10, 2019.

State Level: GSE Investment Authority

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.

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.

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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.

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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.
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