WASHINGTON—Key credit-union priorities in the National Defense Authorization Act (NDAA)—including bipartisan enhancements to the Central Liquidity Facility (CLF) and improvements to the CDFI Fund—are facing growing uncertainty as negotiations over the bill’s financial services title remain stalled on Capitol Hill.
According to congressional sources and multiple news reports, the holdup has less to do with the CLF or CDFI provisions themselves, which enjoy broad bipartisan support in both chambers. Instead, the impasse stems largely from an internal dispute among House Republicans over whether the NDAA should carry portions of the Senate’s ROAD to Housing Act, a housing-reform package added to the bill’s banking section during Senate passage.
The standoff—led by House Financial Services Committee Chairman French Hill (R-AK)—has frozen the entire banking title of the NDAA and now threatens to push the CLF and CDFI amendments out of the bill altogether as lawmakers race toward a mid-December deadline to finalize the must-pass defense package.
Hill is resisting a compromise proposal sent last week by Senate Banking Chair Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA), according to POLITICO. Hill on Wednesday walked away from another set of financial policy talks tied to the NDAA, Punchbowl News reported, adding that aides for the Arkansas Republican announced their opposition to the CDFI amendments Wednesday.
Jason Stverak, chief advocacy officer at the Defense Credit Union Council, said the fate of key credit-union priorities in the NDAA has become uncertain as negotiations stall.
“We’re at a fork in the road,” Stverak explained. “Things can go either way as lawmakers finalize the NDAA.”
Stverak noted that the core national-defense portion of the NDAA—the military funding and operations language—is finished. What remains under negotiation are the sections controlled by other committees. According to Stverak, Hill has publicly raised concerns about the ROAD to Housing Act, which the Senate inserted into the NDAA’s banking title. That single dispute is now holding up the entire financial services section.
“And unfortunately,” Stverak said, “that puts the CLF amendment—the bipartisan (Kevin) Cramer-(Alex) Padilla language—and the near-unanimous CDFI Fund improvements at real risk.”
Stverak warned that congressional leadership is intent on keeping the NDAA on track for a mid-December floor vote and delivering a bill to the president’s desk.
“In the past, if one section threatens to hold up the entire bill, that section gets jettisoned,” he said. “So, if this housing dispute can’t be resolved, there is a real concern the whole banking portion gets stripped out. And with it, the CLF enhancements and CDFI improvements.”
Asked what DCUC is doing in response, Stverak said the trade group is engaging key contacts on both the House Financial Services Committee and the Senate Banking Committee.
“Our message is simple,” he said. “If they can’t reach a compromise on the housing issue, then move forward with the provisions where there’s universal agreement—the CLF and CDFI improvements. Don’t let one disagreement derail the good, bipartisan parts of the bill.”
Growing CDFI Concerns
With the news on Wednesday about Hill's opposition to the CDFI amendments, Stverak emphasized that DCUC stands "ready and willing to work collaboratively with Chairman French Hill and his team — as well as other lawmakers and regulators — to design sensible reforms that enhance accountability and transparency for the (CDFI) program. But those reforms should not come at the expense of dismantling or weakening the CDFI program. Instead, we should preserve and improve it, because it benefits not only credit unions and community banks, but most importantly the communities and populations they serve.
"Eliminating or undermining the CDFI Fund right now would be shortsighted," continued Stverak. "Doing so would risk cutting off critical capital and financial-service access to small businesses, affordable-housing projects, veterans, and low- and moderate-income households. DCUC encourages Congress to give this proven program every opportunity to continue and evolve — working with industry, Treasury, and community stakeholders to ensure it operates efficiently and effectively.