CUNA Goes On The Offensive Against Bankers On The Hill

Register now

CUNA's new approach to lobbying Congress is raising questions in some circles of the credit union movement and in Congress-and may have complicated the effort to get a regulatory relief bill passed.

Call it "going on the offensive" or "going negative," CUNA has shed its traditional "take-the-high-road" approach and started seeking confrontation with the powerful banking lobby-something that was seen as counterproductive for many years.

The strategy first emerged late last year when CUNA unsuccessfully urged the Federal Reserve to reject an application by credit union foe Harris Simmons and his Zions First Bank to acquire Amegys Bancorp of Texas; then more recently when CUNA called on Congress to investigate the Office of Thrift Supervision for its support of credit union conversions to mutual savings banks.

More recently, CUNA threatened to pull its support from the pending regulatory relief bill if lawmakers agreed to add a provision to increase the business lending cap for thrifts-a measure credit unions are also trying to get into the bill for themselves that is vehemently opposed by the thrift and bank lobbies.

CUNA's direction is not only raising questions, as it was done without discussions with NAFCU, but also in the way it was done, as CUNA President Dan Mica issued a public statement on June 22 making public the confidential negotiations going on between leaders of the Senate Banking Committee and House Financial Services Committee over reconciling their separate versions of the reg relief bill.

Mica, a former member of Congress, bristled at the suggestion that CUNA violated the confidentiality of the negotiations, insisting the so-called proffer in which the thrifts' pet priority was included was made public the day before by an inside Capitol Hill publication that is circulated among congressional staffers. "We didn't make the proffer public," said Mica. "In this particular case, it was already written about. It was already out there."

The CUNA president also rejected the characterization that CUNA's new strategy relating to the banks amounted to "going negative."

"We haven't decided to go negative at all. We've decided to stand up for credit unions," said Mica. "We're moving more to what we call a strategy of good public policy, while acknowledging that we cannot stand back and take it while they, the bankers, continue to criticize us and oppose everything we try to accomplish."

"The credit union white hat was getting a little soggy from getting jumped on all the time," said Mica, who promised more offensive initiatives against the bankers. But at the same time, the credit union representative wanted to deliver a message to the bankers. "As we move forward, this should not be seen as a signal for more wars and more battles between the banks and credit unions," he insisted.

But the bankers were quick to use Mica's statements against the credit union efforts to broaden the reg relief bill and add more credit union provisions. Immediately after CUNA made Mica's statements public, America's Community Bankers, the thrift trade group, said CUNA was being "obstructionist," and trying to "blow up" the negotiations because it didn't like the bill. The American Bankers Association issued similar comments.

Congressional staffers involved in the negotiations appeared to be taking the bait and expressed misgivings at CUNA's approach. "This is not helping the negotiations," said one staffer involved in the process speaking on background.

NAFCU leaders, who were not consulted before CUNA's gambit, were also concerned but were careful not to join the bankers in criticizing CUNA. "We'd like to see reg relief passed in this Congress," said NAFCU President Fred Becker, choosing his words carefully.

Long-time CUNA lobbyist John McKechnie, now the chief congressional liaison at NCUA, also said the regulatory agency wants to see the reg relief bill pass this year. "It's got some provisions in it that would help us be a better regulator and some provisions that will help credit unions better serve their members," said McKechnie.

Both Mica and Becker insisted they wanted the pending reg relief bill-vastly scaled back from the version approved by the House-to pass, but both executives conceded it doesn't really do a lot for credit unions, as the CU Regulatory Improvements Act would. The main concern: the effect passage of a limited reg relief bill this year could have on efforts next year to pass a broader bill in the next Congress. Could key lawmakers say, "we passed a reg relief bill last year; it's too soon to seek further relief," in the next Congress?

Becker conceded that possibility and expressed hope that won't hurt chances of CURIA.

He and Mica agreed that CURIA, despite more than 120 House sponsors, is dead for the year, meaning the credit union lobby will have to start all over collecting sponsors in the next Congress.

"It's a long process," said Becker. "We've done it before. We intend to push for CURIA." (c) 2006 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved.

For reprint and licensing requests for this article, click here.