Three Things You Need to Know about What’s Going on in D.C.

September 25, 2019 at 9:24 am Leave a comment

Yours truly overslept a little this morning, but having just visited the nation’s capital with a hearty group of New Yorkers, I wanted to get out some thoughts to you on what’s going on at the federal level while it is fresh in my mind.

First, the most practical news you need to know is that, if all goes according to plan, the House of Representatives will pass the SAFE Act later today. This is the bill that would essentially allow financial institutions to provide banking services to marijuana-related businesses in states where it is legal to do so. Of course, it remains to be seen whether the Senate will take up this legislation. For what it’s worth, however, I am cautiously optimistic. Even people opposed to the legalization of marijuana understand that it simply is not safe to make legal businesses carry around millions of dollars in cash because financial institutions cannot legally accept their money. Of course, if the SAFE Act does pass, it will put that much more pressure on the state to develop a framework for the legal sale and distribution of marijuana for recreational purposes.

Point number two, what is going on with data security? Despite the fact that virtually every single industry in this country is losing billions of dollars to cyber theft every year, that almost every financial institution has members who are victimized by hackers, and that the last few years have demonstrated that having a robust cyber infrastructure is a crucial national security issue, no one seems willing or able to come forward with a bill that addresses the issue on the national level. What is going on here? I honestly don’t get it. In the absence of federal action, we will see more action on the state level. This is far from ideal. This is a classic federal problem that needs a federal solution, but if Congress won’t act, someone will have to.

Finally, there is a generational and ideological shift taking place within the Democratic Party. On both the state and federal level, you are seeing established members being primaried, often by younger candidates whose views would have made them unelectable just five years ago. I’m concerned that credit unions aren’t adequately preparing for this decisive shift. Credit unions have for decades fought against the banks to keep their tax exemption, but I’ve said it before, and I’ll say it again. The greatest long-term threat to the credit union industry comes not from pro-bank legislators, but from younger progressives disillusioned by the entire financial system that are skeptical of whether credit unions do enough to help the average consumer.

 

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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