WASHINGTON – As Senate debate stretches out on the massive bank reform bill, the credit union lobby is finding itself allied on a growing number of amendments with an unlikely ally – the bankers – even as the bankers fight against key credit union legislation.
In recent days the credit union lobby has joined with the bankers to seek a broader exemption for credit unions and banks from the consumer financial protection agency. They also have partnered to fight against proposed amendments to the bank reform bill that would add new data collection requirements for credit unions and banks, authorize federal regulation of credit card interchange fees, and cap ATM fees.
John Magill, chief lobbyist for CUNA, noted that CUNA and NAFCU are partners with bank groups in the Electronic Payments Coalition, which is fighting congressional efforts to regulate interchange fees on credit and debit cards. “We have found that joining with the bankers in this area of mutual interest is a powerful strategy,” said Magill. “Most know of the animosity between our industries – so, when we show up united on something they can’t help but pay attention.”
Over the years the relationship between the two powerful Washington lobbies has been characterized by their differences over the credit union tax exemption, field of membership, and, more recently, credit unions’ efforts to get broader powers to make member business loans. But the two rivals have worked closely together on bankruptcy reform, working against credit card legislation and against efforts to regulate interchange fees.
“The fact is,” said Dan Berger, chief lobbyist for NAFCU, “we agree on 95% of the issues that affect small financial institutions’ bottom lines, like interchange, [Government Sponsored Enterprises] and regulatory burden. But their extreme hypocrisy shows up on our attempt to raise [the limit on member business loans] even when credit unions have the capital and willingness to lend to small businesses, while the banks aren’t making those loans.”
Meantime, the credit union lobby on Thursday was working on a variety of amendments to the 1,400-page bill. One would give NCUA a seat on a Financial Stability Oversight Council that would oversee appeals of decisions by the proposed consumer financial protection agency. Another would make permanent the increase in federal deposit insurance coverage to $250,000 per account that was enacted two years ago.
During yesterday’s third day of debate in the Senate, a Republican amendment that would have watered down the consumer financial protection scheme to give its duties and powers to existing financial regulators, such as the FDIC, was easily voted down as senators agreed it was the failure of the regulators to provide consumer protection that helped precipitate the financial crisis.
Debate on the bill is expected to continue into next week.
