It was a different time when Dan Mica took the helm at CUNA in the winter of '96.
But one thing remains constant: the importance of the tax exemption to credit unions.
When Mica came aboard CUNA the credit union trade association was in crisis mode. It was struggling to cope with millions of dollars on losses from its credit card processing operations, since sold off. CUNA's very existence was at stake, according to Mica. Soon after, credit unions themselves were threatened when the courts ruled that the multiple groups expansions policy that saved the day for thousands of credit unions was illegal, precipitating a nationwide public relations and lobbying campaign to convince Congress to, in effect, legalize the controversial membership policy.
Times have changed during Mica's 10 years as CUNA president-the longest tenure of any CUNA CEO. Mica expects CUNA to report net income for the trade association of "somewhere around $1.5 million" for 2005, its best year financially, and the credit union lobby has become a mainstay on Capitol Hill, Mica's own former stomping grounds as Congressman from Florida.
The 1996 Campaign for Consumer Choice, which culminated in passage of HR 1151, the CU Membership Access Act, then the successful lobby for bankruptcy reform, helped change CUNA's profile in the Halls of Congress. Along the way, CUNA developed one of the leading campaign funding operations, building its political action committee to one of the most fertile in Congress. At the end of 2005, CUNA's PAC was the fourth most generous in campaign contributions out of 5,000 PACs.
Mica hopes all of this translates into a successful drive in the coming year into action to get regulatory relief-some of it to undo HR 1151-passed while maintaining the cherished credit union tax exemption.
"At GAC I intend to roll out a more system-wide, comprehensive plan where we position credit unions in trying to get all facets of the credit union movement focused a little more clearly on the issues in front of us," he said. "Of course, the key issue, obviously, is we need to not allow bankers to get any foothold on the idea that we ought to be taxed or that we're getting a break."
"You know, for about 200 and some years in this country 'greed' has always been associated with the word banker, and in the last year they've made a concerted effort to use the word 'greed' with the big credit unions, and if you say it over and over enough, people begin to believe it. We need to make sure that doesn't happen. So we'll be talking about the system-wide repositioning effort and we'll be kicking it off here next week.
"First," he continued, "we want to essentially say to the Congress, 'you need to understand how important we are to America and to American consumers.' Two, we're tired of banks consistently attacking us and we hope more of you will restate the message back to them to knock it off. 'If you want to talk to me about financial services issues and legislation, tell me specifically how its refers to you, I don't want to talk about credit unions.' We have a number of members saying that to banks. We need to increase that number.
"And three, we're not here to attack banks. We have a couple of issues that are key to us. One of which is (the CU Regulatory Improvements Act), and within CURIA is prompt corrective action. You need to know that those are important issues and that you support us," said Mica.
"However, you also need to know that taxing credit unions kills credit unions, and that issue is life and death for us and we want you to understand very clearly and directly that is our one core issue and we want you to understand how that will impact your district.
"This is true of the large credit unions, as well as the big credit unions," emphasized Mica of the banks' efforts to repeal the tax exemption for large diversified credit unions. "Taxing some credit unions is a non-starter.
"First, you have to acknowledge a false premise; that the large credit unions are different than the small credit unions. And they are not. This is bank-speak, double-talk, that the large ones have somehow morphed into something different than the small ones. They operate under the same laws. They operate under the same principals. They operate under the same philosophy. They're not-for-profit financial cooperatives. And the larger they get, the more capable they are of serving more people of modest means."
"No one in (November's congressional hearing on the credit union tax exemption) called for taxing credit unions," continued Mica. "Not a single member of Congress called for credit unions to be taxed. Not a single consumer group called for credit unions to be taxed. The Treasury did not call for us to be taxed. The only thing that anyone had a criticism for us, other than the traditional bankers who want to put us out of business, is they wanted us to do even more. 'We want you to do more and we want to be able to know that you're doing more.' And that argument came from our friends and our opponents.
