There’s been a notable absence in Washington this spring: credit unions.
The industry long worked to get politicians to prioritize their goals through activities, such as policymakers visiting branches and having credit union executives participate in Hike the Hill events.
But now with lawmakers spending weeks in their home districts and
Virtual town halls and Zoom meetings with legislators are the order of the day since “members of Congress can’t go out and meet with people now, so they’re really looking for feedback from credit unions in their district any way they can get it,” said Brad Thaler, VP of legislative affairs at the National Association of Federally-Insured Credit Unions.
Credit unions have seemingly increased at least some of their advocacy efforts in recent years. In 2019, the industry spent almost $8.2 million on lobbying, up about 8% from a year earlier, according to data from OpenSecrets. That’s the largest amount spent on lobbying by the industry since 2013, according to OpenSecrets. The Credit Union National Association has also
Though face-to-face meetings are on hold due to the panemic, credit unions are making the most of the situation. More than 400 credit union professionals from across Michigan met with Gov. Gretchen Whitmer earlier this week via Zoom, and leagues in Texas and other states have facilitated similar large-scale meetings.
One advantage of discussing issues virtually, several sources said, is that it may have made policymakers more accessible to the industry. While some of that can be attributed to the need for constituent input in a fast-moving legislative environment, some have suggested lawmakers are able to address industry issues more quickly these days because they aren’t being pulled in multiple different directions for activities such as in-person voting, constituent visits and committee meetings.
“It also has to do with the fact that everybody is working remotely right now,” said Ryan Donovan, chief advocacy officer at the Credit Union National Association. “There is a level of disconnect that has taken place in terms of that person-to-person interaction that is just human nature to try to fill.”
“I think their response is more immediate now than it probably would’ve been," noted Jeff Olson, president and CEO of the Credit Union Association of the Dakotas. "Not that they weren’t getting back to us, but it seems like now they’re reaching out to us looking for information.”
Olson said CUAD has worked remotely with South Dakota Sen. John Thune on an agriculture lending bill and participated in multiple town hall events with representatives from each state. The league also advised South Dakota Gov. Kristi Noem about strategies for reopening some parts of the state, though South Dakota was not under a stay-at-home order.
Donovan suggested the shift to remote advocacy creates more opportunities for the industry to get its message across, particularly as more people get comfortable with video conferencing.
“I think you’ll see that continue but I don’t think it will reduce the importance of something like a branch visit or an in-person town hall if it’s safe to do those types of things,” he said.
It’s unclear if this type of advocacy will be as effective in the long run.
Credit unions got many of the results they hoped for out of the CARES Act, but the first draft of its successor, the HEROES Act, didn’t include priorities such as additional flexibility with member business lending and extending provisions related to NCUA’s Central Liquidity Facility. Sources said it wasn’t evident whether those omissions were the result of pressure from bankers, a reflection of political realities or other factors.
“There’s no substitute for in-person shoe-leather lobbying on Capitol Hill and at NCUA,” said John McKechnie, a credit union consultant in Washington. “You’ve got to be physically present at times and, candidly, there’s a lot of value in just having a cup of coffee with a staffer in the cafeteria and setting up a series of meetings so you can stay put and the staff comes and talks to you in an out-of-office setting. At the base of it, advocacy is a very human process and you can’t completely do everything electronically.”
Priority shift
Aside from the change in how advocacy is done, the industry’s legislative and regulatory priorities have been altered almost entirely to focus on the recovery, with the key issues from even as recently as three months ago moved to the backburner.
There may be no better example of that than NCUA’s proposed rule governing credit unions’ bank acquisitions. The comment period on that proposal,
On the legislative front, finding a solution on pot banking was top of mind at the start of 2020 —
“The pandemic response has taken all the oxygen out,” said Thaler. “Anytime you’re dealing with legislative issues, the environment plays a big factor in what issues you’re able to push and when. This is not necessarily anything different.”
CUAD’s Olson said that even with pivoting to the COVID-19 response, policymakers “have opened up their eyes to a lot of things.” The Fed easing the rules surrounding Reg D might not have been a high priority in the past, but it still helps the operating environment for credit unions, he said. Similarly, a
Toronto-Dominion Bank plans to give most employees the option to return to the office this month and is aiming for workers to officially transition to their new working models by June.
The Biden administration once again extended the pause on student loan payments enacted to help borrowers during the COVID-19 pandemic, this time through the end of August.
Employees will still have some flexibility to work from home, but are strongly encouraged to collaborate with colleagues in person, according to people familiar with the matter.
The big question moving forward is how the election factors in and whether the window for passing legislation closes.
“Typically in an election year we don’t see a lot done in terms of major legislation unless it’s an emergency, and clearly we’re in an emergency so you’re seeing a number of bills move forward with bipartisan support,” said Thaler.
“All sides want to try to help the country recover. We have an economic crisis and a public health crisis. Given the fact that there’s divided government, neither party wants to be blamed for making things worse because they both have something to lose in November," he added.
McKechnie said now is the time for credit unions to make their case on legislative issues since it’s unclear when Congress will put aside the pandemic response in favor of politicking.
“The campaign season will be upon us soon enough, but based on what I hear from congressional staff, the normal laws of political gravity don’t apply at the moment,” he said.
