Last weekend the fam all saw Top Gun: Maverick. It was feel-good; predictable; big old school Hollywood AND I LOVED IT. Each of the kids brought a friend to the movies. Most of my son’s friends had already seen it, but one of the “Jacks” had not. My son Wyeth has three friends named Jack. I asked which one was coming and he said it was the one he had never met in person. Huh? Oh, and Jack is 6’8”. As a parent there was a lot for me to unwind in that statement. Jack is a friend of Jack and Jack. Wyeth has met Jack and Jack in person because he does karate with Jack every week, and other Jack is a friend of first Jack and was at a get-together once. Second Jack knows tall Jack from school and all three Jacks and Wyeth play online gaming together all the time. Got it? So, tall Jack and Wyeth met for the first time in person. Jack was a lovely kid, was actually 15, and was yep, 6’8”.
Recession or No recession.
As we all know by now, on Wednesday the Fed raised rates by 75 basis points — the largest hike since late 1994 — and signaled that substantially more rate hikes were in the works. The Labor Department will release the June consumer price index report on July 13. Powell said the Fed might hike rates in July by 50 or 75 basis points in his press conference. Slowing inflation and not putting the country into a recession is an incredibly difficult task. We will know in the upcoming months whether we are achieving that.
Support or not support.
The Financial Services Racial Equity, Inclusion, and Economic Justice Act package, which includes the Expanding Financial Access for Underserved Communities Act passed the House this week. The Underserved Communities Act allows all federal credit unions to add underserved areas to their fields of membership. The larger package though contains many provisions which are not positive for credit unions. If the larger bill were to pass, would the negative provisions be worth it? I think no. In my opinion, we need to outright oppose this in the Senate to get a clean bill that would allow credit unions to add underserved areas to their fields of membership. In regard to any legislation my basic mantra is to do no harm and this bill would do harm. Did you know that the American Bankers Association is advertising for a VP of Credit Unions? Yep, they are going to hire a full time employee to look for ways to mess with us.
Overdraw or not overdraw.
The House Financial Services Committee was slated to mark up a bill sponsored by Carolyn Maloney D-NY to restrict overdraft protection earlier this week. The markup got postponed for several reasons and will happen sometime in July. Part of the strategy to knock it out of the mark-up was to get Ds to object to the bill. That did not happen by the time of the mark-up but now that it is delayed we have more time. No member of the Virginia delegation sits on HFSC, but we should still be talking about this with our Congressional Delegation. The League has met recently with Senator Kaine, Representative Beyer and will meet with Representative Wexton today. The CFPB continues down their road of trying to get institutions to eliminate overdraft by market forces. Yesterday they issued a RFI on overdraft practices.
In their blog post, the CFPB lists five questions they have been asking financial institutions regarding overdraft fees. These questions give some insight into what criteria the Bureau might use to determine if a financial institution’s overdraft practices should be changed. The post also praises banks and credit unions who have made consumer-friendly changes to their programs already. But two sentences loom large in the middle of the post: “We intend to use this information to identify institutions for further examination and review. We also plan to provide feedback to each institution, as well as to share this information with other regulators.” This signals that how institutions stack up against their peers on these questions could subject them to regulatory action. It also means this impacts all credit unions – not just those large enough to be examined directly by the CFPB. If the CFPB gathers data, sets the guardrails for acceptable overdraft levels, and shares them with NCUA, they will no doubt become part of your next examination.
Tomato or Tomahto.
In yesterday’s NCUA Board Meeting, data gathered from credit unions on post-exam surveys was presented. If you’ve been through an NCUA exam recently, you may have seen this survey. Overall, the results of the surveys were very positive and showed examiners were communicating information effectively to credit unions. One interesting data point was that over 90% of credit union respondents indicated that they received their exam report within 10 days of the exit meeting. This is interesting because here at the League we’ve heard from several of our member credit unions of extreme delays in final exam reports being delivered, sometimes many months after the exit meeting- both on the federal and state side. Perhaps there is hope on the horizon – NCUA’s new examination platform, MERIT, is web-based and will automatically make the exam report available to credit unions when the exam concludes. In today’s meeting, NCUA indicated that they will not only be continuing the post-exam survey but expanding it to include additional questions and opportunity for feedback.
Pass a budget or not pass a budget. Talk about down to the wire, the Virginia General Assembly will reconvene in Richmond on Friday in hopes of finalizing the Commonwealth’s two-year budget. The Governor isn’t vetoing anything in the General Assembly approved budget, he does however have thirty-eight amendments he is proposing which range from the technical to the controversial. With no comment from either the Senate Democratic caucus or House Republican caucus, it is yet to be seen how contentious tomorrow’s session will be and if any of the Governor’s amendments will make it into the final budget. The General Assembly and the Governor have less than 2 weeks until the current fiscal year ends on June 30th and a budget must be approved before then.
Speaking of down to the wire, yesterday was finally my kiddos last day of school. Summer projects that do not involve gaming, movies, or other screens are being lined up as we speak. A good weeding project in the hot sun always builds character. Ha! I look forward to seeing everyone at EMERGE next week!
Happy Father’s Day to all the dads out there!
Carrie R. Hunt
P.S. How do you Credit Union? I would love to hear from you. Always feel free to shoot me a note or call.