ALBANY — The board of directors of the Albany–based New York Credit Union Association (NYCUA) has approved its 2019 state legislative priorities.
During this year’s state legislative session, NYCUA plans to advocate for legislation dealing with data security, mortgage-foreclosure reform, state and local-government deposits, and improvements to the state charter.
NYCUA contends that it will continue to advance a “pro-credit union and pro-consumer agenda,” per a news release posted on its website.
NYCUA says it would like to see legislation that would require all entities that handle consumer information to comply with comprehensive data-security standards and hold retailers accountable for the costs of data breaches if they fail to meet state cybersecurity standards.
Data breaches expose credit-union members to fraud and identity theft and result in “significant monetary costs and reputational damage to credit unions,” NYCUA says.
When a data security breach occurs at a given retailer, it’s possible that it could lead to transactions on a person’s credit or debit card, says William Mellin, president and CEO of NYCUA. He spoke with CNYBJ in a telephone interview on Jan. 29.
The financial institution that issued the card is “100 percent responsible” for the losses that result from that data breach, Mellin contends.
“The merchant has no accountability whatsoever, relative the financial requirements to make it whole,” he adds.
He went on to say that credit unions are under “restrictions” that don’t let them advise their members that a breach is the retailer’s fault.
“Let’s hold whoever is accountable for the breach to be financially responsible to rectify the breach,” says Mellin.
New York’s “lengthy and complex” foreclosure process causes homes to “languish and deteriorate, negatively impacting communities and neighborhoods,” NYCUA says.
Without sacrificing consumer protections, NYCUA contends it will pursue “simple, common-sense” reforms that will ease the tremendous burdens credit unions and communities face when attempting to foreclose on a property.
Mellin asserts that changes to the mortgage-foreclosure process would help all financial institutions, not just credit unions. He says that New York has “one of the longest” foreclosure processes in the country, but also notes that it was “well intentioned.”
The process seeks to make sure that the homeowner has “every possible opportunity” to stay in the home as long as possible to make the mortgage payments and move on. But, in many cases, they’re just able to recover and the lengthy foreclosure process begins.
“It doesn’t really do the individual, the borrower, the homeowner any good because they’re in limbo during this transitional period. It’s hard for them to get on with their life,” says Mellin.
He says credit unions will work with members to see if they can forgive some of the debt, change some of the debt over to some other kind of a loan, or get the house sold off.
NYCUA would like to see a law that speeds up the process, protects the consumer, and gives a homeowner every chance to keep the home.
“But if it’s not going to work out, let the financial institution move forward, let the member move forward, foreclose on the property, sell the property, and hopefully, be able to pay that debt off,” he says.
State and local government deposits
New York is not among the “majority” of states that have enacted legislation authorizing credit unions to accept public deposits, NYCUA says. Authorizing governments to deposit funds in credit unions will “ensure taxpayer money is getting its best return,” it contends.
Most states allow their municipalities, such as a city or school district, to use a local credit union. As an example, Mellin cites the Albany Fire Department, which has its own federal credit union. The department would like to use its own credit union for its deposits, says Mellin.
“Under New York State law … the Albany Fire Department can only use a commercial bank,” he added.
Mellin also noted that the current state law is more than a century old, dating back to a time that preceded credit unions.
An improved state charter
Mellin calls New York’s credit-union charter “one of the best charters in the country,” but NYCUA contends that an improved state charter would “create increased competition” with the federal charter.
By improving the state credit-union charter, New York has the opportunity to expand credit-union access and allow more New Yorkers to “reap the benefits” of credit-union membership, NYCUA says.
Federally charted credit unions are allowed to offer certain limited services to non-members, such as cashing payroll checks.
“[They can also] offer the opportunity to cash their check and maybe they want to pay their local utility [and other bills] … cash that check and turn it into money orders for maybe four or five or six different obligations,” says Mellin.
For more than 100 years, the New York Credit Union Association has served as the trade association for the state’s credit unions, which collectively hold more than $83 billion in assets and serve 5.8 million members.