FOM Modernization Bill Introduced in Senate 

Sen. Alex Padilla (D-A) introduced the CUNA and League-led Expanding Financial Access for Underserved Communities Act. The CrossState-supported bill, which represents the most significant modernization of the Federal Credit Union Act since 1998, passed the House in June as part of a larger legislative package. 

“We thank Sen. Padilla for his leadership in helping credit unions bring safe and affordable financial services to under- and unbanked communities,” said CUNA President/CEO Jim Nussle. “The House has already passed this bill, and we look to continue to gather support in the Senate for this much-needed update to credit union fields of membership.” 

The legislation would: 

  • Allow all federal credit unions to add underserved areas to their field of membership. 
  • Exempt business loans made in underserved areas from the member business lending cap. 
  • Expand the definition of an underserved area to include any area that is more than ten miles from the nearest financial institution branch. 

More than 750 census tracts are financial deserts, and a net 7,800+ bank branches closed between January 2005 and March 2021, according to CUNA research. Credit unions opened more than 1,400 net credit union branches over the same time period. 

House Financial Services Committee Chairwoman Maxine Waters (D-CA) introduced the House version shortly after the 2022 CUNA Governmental Affairs Conference and it passed out of the House in May. 

NJ and PA Credit Union Executives Visit with Legislators and Regulators at Hike the Hill 

Credit union executives from New Jersey and Pennsylvania met with legislators and regulators to advocate on behalf of credit unions.  On day one, credit union leaders heard from the National Credit Union Administration, the Consumer Financial Protection Bureau, National Labor Relations Board, and Federal Housing Finance Agency.  

On day two, the group will fan across Capitol Hill visiting with 20 legislators from New Jersey and Pennsylvania. Highlighting day one was a free-flowing discussion between credit union leaders and CFPB Director Rohit Chopra as well as visits to Credit Union House from Representative Madeleine Dean (D-PA), U.S. House Financial Services Committee Member and Representative Frank Pallone (D-NJ), U.S. House, Energy, and Commerce Committee Chairman. 

CrossState also introduced a new component that allowed members of the media to interview credit union leaders and presenters at Credit Union House.  Video clips of all presenters can be made available upon request.    

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Don’t delay too long. The room block deadline is September 26. Reserve your room here. 

NJ Senate Schedules Confirmation Vote on Platkin as Attorney General, Swearing in of New Senator   

The New Jersey Senate has added a voting session for September 29 to swear in Renee Burgess (D-Irvington) and hold a floor vote on Gov. Phil Murphy’s nomination of Matt Platkin as attorney general. 

Platkin was tapped as the state’s top law enforcement official in February and has been serving as acting attorney general since February 14. Murphy’s former chief counsel was approved by the Senate Judiciary Committee by an 8-2 vote last month. 

Burgess was elected last week to succeed Ronald Rice (D-Newark) as the new senator from the 28th district. Citing health issues, Rice resigned last month from the Senate seat he has held since 1986. 

It is possible that the Senate will also vote on some legislation left from before their summer recess. 

Confirmation hearings for two New Jersey Supreme Court justice nominees, Rachel Wainer Apter and Douglas Fasciale, are expected to be held on October 13. 

Department Of Human Services Receives Federal Funding to Support Medicaid Beneficiaries Receiving Care Services in Their Community 

The Department of Human Services (DHS) today announced that Pennsylvania has received an estimated $12 million in federal reimbursement funding from the Centers for Medicare & Medicaid Services (CMS) for the Money Follows the Person (MFP) Program to continue to support new and existing activities that meet the criteria for MFP funding.  

The MFP program allows states to leverage federal dollars to help Medicaid beneficiaries who live in institutions receive services they need in community settings instead. The MFP program provides the state with the financial flexibility to allow services to “follow the person” as older Pennsylvanians or those with a disability transition from an institutional setting back into the community.  

Since 2008, Pennsylvania’s participation in MFP has helped more than 4,500 individuals transition into the community, and MFP funding has provided Pennsylvania an estimated $180 million to cover a percentage of Home and Community-Based Services (HCBS) and administrative activities.    

MFP funding can be used for education/outreach, training, IT enhancements and data analytics, capacity building, and pilot programs.  

Political Updates 

Firefighters Flip from Kean to Malinowski in NJ Battleground CD7  

An influential public employee union that backed Democratic U.S. Rep. Tom Malinowski (D-Ringoes) for Congress in 2018 and then Republican challenger Tom Kean, Jr. (R-Westfield) in 2020 has now flipped back to Malinowski. 

The New Jersey State Firefighters Mutual Benevolent Association (NJFMBA) has decided to support Malinowski’s re-election bid in New Jersey’s 7th district, considered one of the most competitive U.S. House races in the nation. 

Kean had won the endorsement last time based on his longtime support of firefighter issues as a legislator, and his service as a former volunteer firefighter. 

The union president, Eddie Donnelly, cited Malinowski’s support for repealing the Windfall Elimination Provision, which reduces social security benefits for individuals who earned a pension through a job that did not participate in payroll tax withholdings. 

Donnelly said that his union had some issues with Malinowski in the last election, including a lack of communication with paid firefighters in his district.  

“He took the time over the last two years to fix that,” Donnelly said. 

The NJFMBA also endorsed Republican U.S. Rep. Christopher Smith (R-Manchester), along with eight other Democrats, including Reps. Andy Kim (D-Moorestown), Josh Gottheimer (D-Wyckoff), Mikie Sherrill (D-Montclair), and Robert J. Menendez (D-Jersey City), who is seeking the open 8th district seat. 

But the firefighters took a pass on the 2nd district, where Republican Rep. Jeff Van Drew (R-Dennis) faces Democrat Tim Alexander. The NJFMBA backed Democrat Amy Kennedy in 2020. 

This could be a course correction for Donnelly, whose endorsement of Kean hampered his bid for the Democratic nomination for state Senate last year.  

After Kean eschewed a bid for re-election to the state Senate to focus on his rematch with Malinowski, Donnelly entered the race to take on Republican Jon Bramnick (R-Westfield), then the Assembly minority leader.  

But Donnelly dropped out of the race a few weeks later after some Democratic leaders pushed back on his support of Kean over Malinowski, and for his endorsements of Republicans in other races in recent years. He has said that he has no intention of running for office in the future.  

Four years ago, the firefighters’ union endorsed Malinowski over Rep. Leonard Lance (R-Clinton Township). In Donald Trump’s midterm election, Malinowski unseated Lance by five percentage points.  

Asm. Moriarty Deflects Senate Speculation NJ LD4 

New Jersey Asm. Paul Moriarty (D-Washington), who could soon be a candidate for the State Senate should state Sen. Fred Madden (D-Washington) choose to retire, said last week that he remains firmly behind Madden and would not elaborate on his own plans. 

Madden, until recently the chairman of Gloucester County Democratic Party, is an old standby in South Jersey politics, serving in the Senate since 2004. Nearly that entire time, he has been joined by Moriarty, who was elected to the Assembly in 2005.  

But the very moderate Madden has been the subject of retirement rumors for years, and 2023 may be the year he finally calls it quits. The 4th legislative district he and Moriarty represent was made significantly more Republican during the redistricting process; Gov. Phil Murphy would have lost the new lines by around five points, prompting a competitive fight that Madden may not want to wage.  

If Madden does depart, Democrats do not have an obvious candidate to replace him.   

Moriarty and his running mate, Asw. Gabriela Mosquera (D-Gloucester), are both flawed options from the perspective of the South Jersey Democratic establishment: Moriarty because of his ambivalent relationship with top South Jersey Democrats, Mosquera because of her residency in Camden County. The seat is typically viewed as a Gloucester-based district, even though the majority of its residents live in Camden County.  

Gloucester Democrats may look to tap someone other than Moriarty or Mosquera, though that might further jeopardize Democratic control of the highly competitive seat. And Moriarty could run regardless of whether the local Democratic parties support him though. 

National News 

FHA to Reassess Aspects of FHA Catalyst’s Electronic Appraisal Delivery Module  

The Federal Housing Administration (FHA) Catalyst’s Case Binder Submission, Claims, and Single Family Default Monitoring System Reporting Modules are handling the exchange and integration of key information for thousands of FHA transactions each week. The FHA Catalyst work remains a top priority, and FHA is dedicated to delivering top-quality 21st century technology for lenders, servicers, and FHA.  

To ensure the highest quality technology development, FHA is announcing that it is reassessing aspects of the development and implementation of the Electronic Appraisal Delivery (EAD) module on the FHA Catalyst platform. As it completes this reassessment, FHA is pausing full completion and integration for the FHA Catalyst: Electronic Appraisal Delivery (EAD) Module.  

FHA strongly recommends that industry partners pause EAD onboarding and direct integration activities until final determinations are made regarding the electronic appraisal delivery system for loans originated for FHA insurance endorsement. This recommendation is only for the FHA Catalyst: Electronic Appraisal Delivery Module and does not impact integration or onboarding activities for any other FHA Catalyst module.  

FHA will provide further updates on its plans for electronic appraisal delivery as they become available.  

Federal Trade Commission Returns More Than $415,000 To Consumers Harmed by Deceptive Car Dealer Tate’s Auto  

The Federal Trade Commission (FTC) is sending payments totaling more than $415,000 to 3,508 consumers who financed a car or truck at a Tate’s Auto dealership after January 1, 2013, and later had the vehicle repossessed. Tate’s Auto, which operated dealerships in Arizona and New Mexico, allegedly deceived consumers about payment information and falsified information on consumers’ financing applications.  

Eligible consumers will receive a check in the mail, unless they specifically requested a PayPal payment. Recipients should cash checks within 90 days or redeem PayPal payments within 30 days. Consumers who have questions about their refund should call the refund administrator, JND Legal Administration, at 888-964-0009. The Commission never requires people to pay money or provide account information to get a refund.  

The FTC sued Tate’s Auto in 2018 for inflating consumers’ income on financing applications to third-party lenders, as well as deceiving consumers about the lease or financing terms of the vehicles they were buying. Many of Tate’s customers were citizens of the Navajo Nation, and Tate’s Auto frequently ran radio and print ads in Navajo media. The FTC settled with the auto dealerships in August 2020 and ultimately reached a settlement with the individual defendant in July 2021 that required the defendant to pay money for consumer redress. The FTC wishes to acknowledge the valuable assistance of the Navajo Nation Human Rights Commission during the investigation of this case. 

The Commission’s interactive dashboards for refund data provide a state-by-state breakdown of refunds in FTC cases. In 2021, Commission actions led to more than $472 million in refunds to consumers across the country, but these refunds were the result of cases resolved before the U.S. Supreme Court ruled in 2021 that the Commission lacks authority under Section 13(b) to seek monetary relief in federal court going forward. Because of that ruling, the Commission no longer has its strongest tool to return money to consumers, and it will become harder to provide refunds to consumers harmed by deceptive and unfair conduct going forward. The Commission has urged Congress to restore the Commission’s ability to get money back for consumers.