Hello, and thank you for joining us for the Michigan Priority Report for March 2018.
As you all know, the big news this month was the March 14th passage of the Senate Regulatory Reform bill, Senate Bill 2155. The Michigan Credit Union League, CUNA and credit unions across the country have been advocating for regulatory relief for years, and this bill is a strong step in the right direction. Today, I’ll be providing you with some additional detail into what the senate bill actually contains in the way of regulatory relief.
Looking at several key provisions impacting credit unions, the bill addresses minimum standards for residential mortgage loans. Specifically, it provides that loans held in portfolio would be considered “Qualified Mortgages” for lenders with less than $10 billion in assets.
As we all know, lenders that hold loans in portfolio have a major incentive to ensure the borrower’s ability to repay. Ultimately, this provision will help credit unions — many of which are primarily portfolio lenders — continue to provide mortgages to their members, even in circumstances where rigid adherence to the one-size-fits-all Qualified Mortgage rule would deny a member the opportunity to own a home.
The bill also removes the additional HMDA data points required to be collected by Dodd-Frank. This will provide much needed relief, particularly for smaller credit unions, which otherwise bear a heavy expense to bring their systems into compliance with a rule that does very little – if anything – to provide members with additional protection.
And importantly, Senate Bill 2155 provides credit unions with specific MBL relief through a parity provision. Under current law, when a bank makes a loan for the purchase of a one-to-four-unit, non-owner-occupied residential property, the loan is classified as a residential real estate loan. Credit unions that make the same loans, however, are forced to classify these as business loans. Senate Bill 2155 reclassifies one-to-four-unit, non-owner occupied residential loans as residential real estate loans, so the loan wouldn’t count against the member business lending cap. This stands to provide access to millions in additional dollars of capital for investment across Michigan.
Finally, the bill provides a safe harbor for credit union employees who report alleged elder financial abuse. The relationship between the credit union and its members puts credit union employees in an ideal position to detect suspicious activity around senior accounts. However, in some cases, privacy laws make it difficult, even impossible, for employees to ring the alarm bell when exploitation is suspected. This bill tells credit union employees very clearly: if you see something, say something — and when you do, you will not be liable for doing the right thing.
We support this bill because it will reduce the regulatory burden on credit unions. For example, credit unions will be able to make the process of getting a mortgage loan simpler. Local communities will have better access to affordable housing. Finally, and most importantly, with less regulatory burden, credit unions will be able to concentrate more on serving their members instead of spending time complying with unnecessary regulatory burdens originally intended for large Wall Street banks.
On behalf of the Michigan Credit Union League, I applaud Senators Gary Peters and Debbie Stabenow for taking leadership and working toward a meaningful compromise that benefits smaller, community-based lenders like credit unions. Their courage in working to find impactful reforms that benefit small lenders in communities across the state of Michigan earns them our support as champions for Michigan credit unions.
While this is an important win for credit unions and credit union members both in Michigan and across the country, it’s not quite time for a victory lap. Even though the bill enjoyed bi-partisan support in the Senate, we need to pay close attention as the bill moves into the House. We will be working with all Michigan credit unions to let their House members know this is our top priority. We need to get through the House and onto the president’s desk!
Turning attention to state advocacy, on April 18th and 19th, credit unions from across the state will be joining us in Lansing for the MCUL Government Affairs Conference. Several important topics of discussion at this year’s conference will include data breach and lienholder notification standards.
As previously reported, CUNA Chief Advocacy Officer Ryan Donovan will join us for a federal advocacy update, and we’ll also have John Kolhoff from DIFS and Jason Shultz from NCUA offering inside perspectives from regulators.
Following the MCUL GAC, our Education and Events team is hosting its annual Spring Leadership Development Conference in Mt. Pleasant April 27-29, and Collector’s Training School May 2nd in Troy. The Spring Leadership Development Conference is an event tailored for credit union CEOs, directors and committee members and offers high-level insights into areas like regulation and compliance, strategic and operational planning, lending and more. This year’s event is being held at the Soaring Eagle Casino and Resort in Mt. Pleasant, and attendees are encouraged to bring guests to join in the fun and activities surrounding the conference.
Also in March, the CU Link cooperative advertising team finalized partner rates for our new and improved integration program. Michigan credit unions can visit MCUL.org/Integration to browse and download new CU Link marketing assets, or to connect with one of MCUL’s approved partners for easy campaign integration.
Switching to CU Solutions Group news, CUSG Technology Solutions recently finalized and published its first set of CMS updates for 2018. New enhancements to our flagship web content management system include updates to data auditing, expanded ADA tools, and design and aesthetic upgrades. The team is now preparing its second set of enhancements, and in total, expects to publish 10 batch updates in 2018.
Momentum with LifeSteps Wallet continues to grow. With more than 30 credit unions currently in queue for the mobile banking enhancement suite, Security Credit Union launched its own branded version just last month.
Technology Solutions also continues to make strides with ADA web compliance. The team now offers a comprehensive service that runs a deep scan of a credit union’s website and automates the majority of required ADA corrections. Then, nonautomated fixes are corrected manually — typically with a quick turnaround. Recently, CUSG finalized a contract with a new service provider, AudioEye, at the beginning of November 2017, and we already have more than 60 ADA clients — a number that’s steadily growing. The team is now working on an ADA web service specifically built for SAS credit unions.
In March of 2018, CUSG Marketing Solutions launched our Just Getting By campaign nationally to encourage honest conversations about money and address the great need for free and accessible financial education. The campaign provides attribution for CUSG and serves as a vehicle to drive more traffic to CUSG social media management. Through the Just Getting By campaign, Marketing Solutions is also developing a financial literacy content library that credit unions can purchase and deploy through their own websites and mobile channels.
Finally, our Performance Solutions team has launched a new product called Planning Pro. This strategic and operational planning software is designed to help boards develop their strategic plan and integrates tracking features designed to ensure your annual goals become reality. Our own Dave Adams discussed the software in his recent CU Insight feature: CEO Connect. Look for more information in coming months on this exciting new product, and view Dave’s video on either MCUL.org or CUSolutionsGroup.com.
Well, that’s all for this month’s edition of Priority Report. Before I sign off, I’d like to thank all our credit unions once again for their hard work and dedication as we work to pass regulatory relief. We scored a major victory this month, and it wouldn’t have been possible without strong and resilient grassroots support from the credit union community. While we certainly have more work to do, we should take a moment to recognize that when we come together, and speak in a strong, unified voice, we can accomplish great things. We’ll see you next month.