WASHINGTON-Community banks across the country are lobbying Congress against a proposal to add an increase in the member business loan cap for credit unions to the pending job bill, leaving the long-sought credit union initiative in increasing doubt.
The banking lobby's efforts could dim chance the Senate will add the amendment to the bill, according to several Capitol Hill observers.
The Independent Community Bankers of America and 29 of its affiliated state community banking associations urged Senate Majority Leader Harry Reid and Senate Minority Lader Mitch McConnell to pass the bill without the credit union amendment, sought by credit unions ever since the 12.25% of assets MBL cap was enacted as part of HR 1151, the 1998 CU Membership Access Act.
"We urge prompt enactment of the Small Business Jobs Act with the (Small Business Lending Fund) and without the dangerous (MBL) amendment," the bankers said in a letter to the two Senate leaders.
The bankers assault comes just weeks after the ICBA and its state affiliates teamed with the credit union lobby to unsuccessfully fight the interchange amendment in the bank reform bill and signals a truce between the two traditional rivals is at end
The jobs bill, which would create a $30 billion fund to invest in community banks for small business loans, is probably the last chance for the MBL initiative in this Congress.
Move Is No Surprise
That bankers are now lobbying against a CU provision is no surprise to credit union advocates. "We always expect that anything good for credit unions, banks will greedily oppose it," said CUNA's John Magill. "We will try to match the bankers person for person and call for call to ensure that MBL provision will be considered."
Toxic Partisanship Bigger Issue
Perhaps the bigger blot against the MBL language is the mood in Congress, rather than the banking lobby's efforts, he suggested. "The political environment right now is so partisan and so toxic that it would be hard to get ANYTHING passed," he said. "If I were betting [on Congress lifting the MBL cap] based on pure policy reasons, it's a slam dunk," Magill offered. "But there are so many other things that have nothing to do with policy that we could get stuck on. We are closer than we've ever been on this issue, and we are going to keep pushing to get it across the finish line."
For its part, NAFCU has pledged to oppose the jobs bill if the MBL provision isn't part of it. "We think it's absurd that the bankers are opposing this. We thought they wanted to get the economy going again, and this is a no cost way to do that with no safety-and-soundness concerns," said NAFCU President Fred Becker, who pointed to the irony of the bank opposition to such a plan despite having received billions in bailout money from the federal government.
