Congressional Elections To Bring More Gridlock

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WASHINGTON – The credit union lobby is cautiously predicting a Republican takeover of the House of Representatives, with Democrats retaining a slim majority in the Senate, creating a more evenly split Congress – and more gridlock.

“If you look at it today, the good money is on the Republicans taking back control of the House,” said Richard Gose, political director for CUNA, which will be contributing in almost 400 congressional races this election, among the most of any interest group. But the CUNA campaign chief said he felt the projected tide of Republican wins will fall just short of giving the GOP control of the Senate.

If that scenario holds true it would mean a Republican House would be sending legislation to a Democratic-controlled Senate, a sure recipe for gridlock.

While CUNA and NAFCU lobbyists were reluctant to talk on the record of the ramifications of a Republican takeover of the House, others insist it will mean an already stalled Congress will be ground to a halt.

Whether that is good for credit unions is debatable.

On the one hand, it means the removal of an activist Democratic leadership in the House, which led the way on legislation harmful to credit unions that restricted credit card practices, overdraft protection programs and opened cards interchange fees to potential price controls.

With Republicans in control of the House and the Financial Services Committee the Congress is expected to cut back on activism. That likely would mean a proposal to expand the Community Reinvestment Act to include credit unions is off the table.

But it also could harm credit unions’ continued efforts to lift the member business loan cap.

“In the next Congress two things are implicit for credit unions,” said Jonathan Lindley, a longtime credit union and S&L lobbyist. “One is the Republicans will gain strength. And they’re obviously not in the credit unions’ corner; they’ve always been in the bankers’ corner.”

“The other is that neither the Obama administration nor the new Congress is likely to take up any legislation that credit unions want because of their [credit unions] opposition to the financial reform legislation.” He was referring to the massive lobbying blitz CUNA and the leagues mounted against the Obama administration’s bill after the interchange amendment was added.

The massive lobbying effort, according to Chuck Zuver, former chief lobbyist for CUNA, also created enmity among Republicans. “Not only did it make Democrats mad, but it made Republicans made,” Zuver told Credit Union Journal yesterday. “Some moderate Republicans thought it [interchange] was a good issue to run on, too. It alienated some more people.”

Zuver, who in recent years has lobbied for the Virginia CU League, said he doubts Democrats will lose the House, as most prognosticators are predicting, but will lose seats and come back in the next Congress with a narrower majority. “I don’t think the House will flip, but I think there’s going to be a big change. It will certainly reduce the Democrats’ ability to do anything.”

A major loss of seats for Democrats, even if they hold a majority in the House, could mean a shake-up in leadership, Zuver suggested. That could mean a change in the Speaker of the House, the Majority Leader or committee chairmen. “Somebody’s going to have to take the blame,” he said.


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