WASHINGTON - The chances of Congress passing legislation to increase the member business lending cap declined last week after the Senate's Democratic leadership delayed a vote on the MBL bill for what could be several months.
The credit union lobby had been hoping to convince the Senate to bring the highly contentious bill up for a vote in the coming weeks, but the latest delay could doom the bill that is a priority for credit unions, as it will have to be debated and voted by the House if the Senate passes it.
The chances of a bill that is strongly opposed by the powerful banking lobby getting passed decline sharply as the fall's elections approach and little of substance gets done in Congress, especially during the summer months when Congress is in recess half the time.
A spokesperson for Democratic Sen. Charles Schumer said last week that the vote on the MBL bill, which would raise the cap on MBLs to 27.5% of assets from form the current 12.25%, will not happen until at least the second half of the year. CUNA President Bill Cheney tried to remain upbeat after the news and insisted that Senate leadership assured them they plan to vote the bill.
'Sleeping' Banks Taking Risk
"If the banks want to go to sleep on this legislation, that's fine with us," said Cheney. "The fact is, however, Senate leadership remains committed to a floor vote on this bill, a promise Sen. Schumer reiterated again today."
Cheney's analysis may be correct, but the fact is also that senators on both sides of the aisle, as well as members of the House, are reluctant to vote the bill that pits two powerful constituent groups against each other. That is the main reason Congress has failed to vote the bill, despite it being before them several times before.
Schumer, who is a member of the Senate Democratic leadership team and a co-sponsor of the credit union bill, initially revealed plans to delay the vote in a private meeting with the New York Bankers Association. If the Senate does not vote until July at the earliest, lawmakers are only scheduled to be in session for four weeks before adjourning for the August recess. Given that it's a presidential election year, it becomes increasingly unlikely that the House and Senate will enact controversial legislation the closer the calendar gets to November.
The CU lobby has been working to increase the MBL limit since it was enacted by Congress at the behest of the bankers in HR 1151, 1998's CU Membership Access Act.
