Week ahead: Credit unions keeping close watch on the Fed, Supreme Court
All eyes are on the Federal Reserve this week as Fed Chair Jerome Powell heads to the Hill.
Powell will deliver the semi-annual monetary policy report to Congress this week, addressing the Senate Banking Committee on Tuesday, followed Wednesday by remarks before the House Financial Services Committee. The Fed’s decision to slash rates in the wake of the pandemic helped fuel the mortgage refi booms and other housing-related gains credit unions experienced in recent months.
In addition to Powell’s testimony, the House Financial Services Committee will also host a virtual hearing on Tuesday examining cybercrime during the pandemic. As consumers increasingly turn to digital retail and digital banking, fraud cases are on the rise in the virtual space – and particularly within mobile banking apps. So much so in fact, that the Federal Bureau of Investigation issued a warning to the public on these attacks. Data from Atlas VPN shows that financial fraud complaints climbed 104% in the first quarter of 2020 year-over-year.
Lawmakers continue to monitor the Small Business Administration’s Paycheck Protection Program, and the House Small Business Committee is expected to review PPP and some of the challenges borrowers face. That hearing is scheduled for Wednesday, and credit union and bank groups alike have called for Congress to pass legislation that forgives PPP loans valued at $150,000 or less. Recent Fed data shows 16 credit unions received roughly $410 million from the Fed's Paycheck Protection Liquidity Facility.
The Supreme Court could also rule on multiple matters this week pertaining to credit unions. Much of the industry will be watching closely to see if the court finally makes a decision regarding the leadership structure of the Consumer Financial Protection Bureau. That case, Seila Law v. Consumer Financial Protection Bureau, could have long lasting implications for how regulators — and the federal government at large — are structured. The decision is expected sometime by the end of summer and a timeline breaking down the case in detail can be found here.
The court released a historic decision on Monday that protects LGBTQ workers from sex discrimination. The groundbreaking ruling is a step forward for progress given that many LGBTQ consumers still face lending discrimination. Last year, Superbia Credit Union was granted a charter in Michigan to become the first credit union specifically chartered to serve LGBTQ members.
Finally, Monday is the last day for credit unions to file comments on the National Credit Union Administration’s proposed guidance on credit union-bank purchases. Those deals came at a fast and furious pace in 2019, and while some new transactions continue to be announced, state regulators have shut some of those deals down and the pace has generally slowed as a result of the pandemic.