WASHINGTON – The credit union lobby is making a last-ditch effort to attach the long-sought member business loan bill to what may be the last train to leave the station this Congress, the Transaction Account Guarantee bill that would extend the guarantee on all non-interest-bearing bank and credit union accounts.
But credit union executives all over the country were calling on Congress this weekend to oppose the TAG bill—which could be voted by the Senate as soon as Monday night—unless it includes the MBL provision.
The credit union lobby is particularly concerned that the bankers could get their pet bill passed in the final days of the lame duck session of Congress, with the credit unions ending up with nothing. "Shame on the Senate if they give bankers another bailout, but leave credit unions with coal in their stockings this Christmas season," said John McKechnie, a lobbyist for several state credit union leagues.
Credit union lobbyists were conceding last week they don’t have enough votes in the Senate to pass the MBL bill on its own, so they are still hoping to attach it to a bill more likely to pass. The TAG bill could serve as the ideal vehicle because it could give both the bankers and the credit unions what they want.
“We are opposed to any legislation that is not a "win-win," for the financial services industry as a whole,” NAFCU President Fred Becker, told the Credit Union Journal Sunday of his group’s opposition to TAG, absent the credit union provisions, which also includes a measure to insure Interest on Lawyer’s Trust Accounts for credit unions
Credit unions have been lobbying Congress for the past decade for an increase in the 12.25% of assets limit on MBLs. A bill before Congress would raise the limit to 27.5%.
But as prospects are fading for passage of the MBL bill, the credit union lobby is now adamant that if they don’t get their top priority passed by Congress then neither should the banks, even if the TAG would also extend the insurance on their TAG accounts too. But since credit unions offer few TAG accounts the MBL bill is of much more importance.
With prospects for the MBL bill fading again, CUNA launched a nationwide call to action asking credit union executives and volunteers to urge their senator to oppose the TAG bill.
The provision was among several temporary measures enacted by Congress during the financial crisis to extend the federal guarantee on financial accounts, in order to bolster confidence in the financial system. The limit on the TAG is set to revert back to $250,000 per account at year-end if Congress doesn’t act.
