NCUA Preemption Victory Headlines Busy Week For Credit Union Advocates
By CU Today Staff —
WASHINGTON—Credit union trade groups said they are seeing momentum on several key advocacy priorities, pointing to a new NCUA preemption rule, favorable movement on the National Defense Authorization Act (NDAA) and continued engagement with lawmakers and regulators as Congress enters a busy summer legislative season.
Ann Petros, vice president of policy engagement and credit union operations at America’s Credit Unions, said ACU is encouraged by the NCUA’s release of its interim final rule on preemption of state laws affecting federal credit unions’ non-interest charges and fees.
Petros noted the rule is scheduled to take effect June 30 and makes clear that NCUA believes it has authority under the Federal Credit Union Act to preempt state laws that attempt to regulate such fees. The rule adds a new section to Part 701 of NCUA’s regulations and is similar to a recent OCC rule covering national banks.
She said the rule recognizes that fees may be set by third parties through contracts with credit unions and cites federal credit unions’ authority to provide services such as lending, share accounts, debit cards and other member products. Based on those authorities, NCUA concluded federal law preempts conflicting state requirements.
Petros said NCUA issued the measure as an interim final rule, bypassing the traditional notice-and-comment process because of the time-sensitive nature of ongoing litigation. However, the agency is still accepting public comments before the rule takes effect.
Calling the move a positive development, Petros said America’s Credit Unions is evaluating its next legal steps in the Illinois interchange-fee litigation. While the group plans to appeal to the Seventh Circuit, she said it will consult with attorneys on how best to inform the courts of the new rule and its potential impact on the case.
DCUC Chief Advocacy Officer Jason Stverak said the trade group was encouraged by the House Armed Services Committee's decision last week to advance its version of the FY2027 National Defense Authorization Act without including any provisions that would negatively affect credit unions.
"We're very thankful for that," Stverak said during DCUC's Monday media briefing.
Stverak noted that attention now shifts to the Senate Armed Services Committee, which is expected to begin marking up its version of the NDAA this week through a series of subcommittee and full committee sessions.
He said DCUC recently resubmitted its May 4 letter outlining the organization's legislative priorities to committee members and staff to ensure defense credit union concerns remain front and center as lawmakers draft the legislation.
"Financial readiness issues are becoming more and more a part of the NDAA discussion as we move forward," Stverak said.
He added that DCUC remains watchful for any proposals that could affect defense credit unions, noting that similar issues surfaced during previous congressional sessions and continue to be monitored closely.
Stverak emphasized that many military installations, both in the United States and overseas, rely on defense credit unions as their primary or only on-base financial institution.
"As we've consistently said, financial readiness equals military readiness," he said.
Looking ahead, Stverak said DCUC will continue working with lawmakers throughout the week, providing information and answering questions as the NDAA process moves forward. He added that the organization also expects to submit additional comment letters on regulatory matters this week.
ACU’s Simpson Active On Capitol Hill
America's Credit Unions Chief Advocacy Officer Kathleen Coulombe said the trade group's advocacy efforts remained active on Capitol Hill last week, highlighted by a series of meetings involving President/CEO Scott Simpson.
"Scott was on Capitol Hill last week meeting with key lawmakers and committee leaders, including Majority Whip Tom Emmer, Senate Finance Committee Ranking Member Ron Wyden, House Ways and Means Committee Chairman Jason Smith, House Financial Services Committee Chairman French Hill, Sen. Angela Alsobrooks, Chairwoman Lisa McClain and members of Rep. Maxine Waters' team," Coulombe said. "Those were very productive conversations focused on cooperative finance and the important role credit unions play in the financial services ecosystem."
Greg Mesack, America's Credit Unions senior vice president of advocacy, pointed to last week's House Financial Services Committee hearing with federal prudential regulators, where NCUA Chairman Kyle Hauptman reiterated the importance of credit unions and the role they play in serving diverse communities.
"We saw a number of questions directed to Chairman Hauptman, and he reaffirmed the value of credit unions, the diversity of the credit union movement and the critical role they play in supporting communities across the country," Mesack said.
Mesack added that America's Credit Unions has also been conducting outreach to members of the Senate Banking Committee following President Trump's nomination of John Crews to the NCUA board.
"We've been stressing the importance of filling the NCUA board and moving the confirmation process forward," Mesack said. "Chairman Hauptman's term expired last August, and we believe it's important to have a fully confirmed board in place. We're hopeful a confirmation hearing for Mr. Crews can take place in June."
Looking ahead, Mesack said the trade group will monitor a Senate Banking Committee hearing on artificial intelligence and continue engaging lawmakers on AI policy. He noted credit unions have previously testified before Congress on AI issues and participated in House leadership's AI task force.
America's Credit Unions is also watching movement on budget reconciliation legislation and is preparing to engage lawmakers early should Congress pursue a third reconciliation package later this year, Mesack said.
Trey Hawkins, Head of Political Affairs at ACU, said the political environment remains highly competitive but highlighted two key wins for credit unions last week: Rep. Brad Sherman advanced to California’s general election after receiving significant support, and Rep. Young Kim is currently positioned to advance as ballot counting continues.
He noted credit unions have 11 endorsed candidates competing in primaries this week across Maine, Nevada, North Dakota and South Carolina, including state Sen. Wes Climer, whom Hawkins described as a longtime credit union ally and likely future member of Congress. Hawkins said the organization continues vetting candidates and preparing for what is expected to be a highly competitive general election, with several credit union champions facing tough races.
Originally reported by CU Today.