Best 'Friend' Request Ever
WASHINGTON-Kristen Christian, the California businesswoman whose Facebook post led to Bank Transfer Day, appeared briefly at GAC. Christian offered remarks drawn from earlier testimony she had given to Congress.
"Growing up in a tight-knit community, I was raised with these values: Live within my means, love my neighbors, and invest in my community. These values are embodied not just by my credit union, Coast Hills, but by people in credit unions all over the country every day.
"The member business cap-legislation would help to create 150,000 new jobs at no cost to government or taxpayers. It seems to me we can't afford to miss this opportunity. (Congress needs to raise the) MBL cap so we can build a better tomorrow by working together today."
Small CUs Talk Collaboration
WASHINGTON-A roundtable of small credit unions was hosted prior to the launch of GAC, with collaboration getting much of the attention. During the session, Drew Egan of the Michigan league and CU Corp and one CU CEO addressed the group, as did Bill Myers, who directs NCUA's Office of Small CU Initiatives. Myers emphasized his office is exploring ways to create better collaboration among small CUs, including a simpler exam format and more attention to risks that are unique to smaller CUs.
Egan detailed the MCUL's shared branching efforts and how it is boosting awareness among consumers age 18-35. Like Myers, he also talked of a collaborative effort within the state that seeks to reduce backoffice-related demands.
Hernandez, who is CEO of three small CUs in Southern California (Mattel, Calcom and City of Downey), shared details on the Southern California CU Alliance, which endeavors to cut operating costs and create shared planning and training sessions.
Mercer New CUNA Chair
WASHINGTON-Mike Mercer, president of Georgia CU Affiliates, has been elected chairman of CUNA, replacing the retiring Harriett May. Also elected as officers to the CUNA Board were: Patricia Wesenberg, CEO of Central City CU, Marshfield, Wis., as vice chair; Dennis Pierce, president of CommunityAmerica CU in Lenexa, Kan., as secretary; Susan Streifel, CEO of Woodstone CU in Federal Way, and Rod Staatz, CEO of SECU in Linthicum, Md., as at-large member.
Watergate Today? Maybe Not
WASHINGTON-Two journalists who rose to fame for their work uncovering the Watergate scandal, Bob Woodward and Carl Bernstein, told GAC the same events today might have meant a different result. The reason, said Woodward, was that in the 1970s there was a better working relationship among both parties in Congress. He noted that the Judiciary Committees in Congress both voted unanimously to investigate the White House role in the Watergate break-in.
"There is a totally different media atmosphere today," Bernstein said. "There are not as many people of conscience. It's harder to find someone who will step out of the mold."
He suggested that sometimes includes the media, a term that has come to represent a far broader swatch of outlets.
Rice: China Is Biggest Issue
WASHINGTON-Former Secretary of State Condaleeza Rice told CUNA's GAC last week that China is clearly the biggest foreign policy issue for the United States, and that should its current prosperity falter, it could alter that country's relationships with countries around the world, especially the U.S.
Rice, who scored points with her audience by noting she has been a member of Stanford Federal Credit Union for 30 years, said China's strong efforts to monitor the Internet for any dissident messages indicate it does not have a "confident leader ship."
Fryzel: Take Pride, Reach Out
WASHINGTON-NCUA board member Michael Fryzell spoke of American history and American workplace pride in remarks to CUNA's GAC. Fryzel noted the meeting was just 10 blocks from where Abraham Lincoln had once lived and worked, and pointed to the extraordinary production that occurred during World War II.
"Just as astonishing, the credit union movement built itself from coffee cans, a few people around a lunch table, and paper ledgers to a financial services system of $950 billion in assets and 91 million American participants," said Fryzel. "It is the preeminent example of how people can succeed by cooperating, by setting as a mission to help one another. Let this be your challenge: Grow membership until you have every family in America using the cooperative services of a credit union."
Positive Press Pays Off
WASHINGTON-The positive press is making a difference for credit unions on Capitol Hill, according to CUNA's CEO.
"I cannot remember a time when credit unions have received more attention in TV, print, radio, and social media," said Bill Cheney during GAC. "This allows us to take a whole new approach with elected officials, and our more aggressive approach is working."
Cheney suggested that credit union lobbying efforts are "closer than ever" to getting MBL legislation passed, pointing to growing Congressional support and citing efforts by Rep. Ed Royce (R-CA) and Sen. Mark Udall (D-CO).
Cheney emphasized that Udahl has said that passage of CU MBL efforts should be seen as a "no-brainer" by members of Congress and stressed the importance of MBL legislation to the economic recovery. "We are going to get this done," he said.
The 4,000 GAC attendees heard Cheney state that credit unions have turned the corner from the recession and that they are "rinsing. Following the worst recession ever and the corporate crisis, credit unions are getting stronger financially. Net worth rebounded by 42.2% last year over the previous year."
'Blockbuster' Of A Lesson
WASHINGTON-Saying credit unions need to pay even closer attention to serving the youth market and embracing new technology, NCUA Chairman Debbie Matz cautioned CUs not to become the "Blockbuster" of the financial industry.
Addressing a general session at the CUNA Governmental Affairs Conference, Matz shared two visions for the future of the movement: one in which CUs embrace emerging technology, such as e-wallets, along with prudent regulation to thrive in the future, and one where a fading industry looks back on 2012 as a pivotal point when it failed to make necessary changes to embrace the new wave of electronic banking, not to mention the lessons learned about risk in the past five years.
Drawing a parallel to the failure of Blockbuster video stores to quickly adapt to demand for online videos, Matz said credit unions have the stronger product and growing consumer support, but they have to take steps to further embrace change and the growing demand for banking across many e-channels. "We don't want to, in 2024, look back on this year and ask, 'What went wrong?'"
Matz added that NCUA is working closely with credit unions to overcome challenges that can limit growth, particularly regulatory compliance burden. She stressed that NCUA final rules have been shaped by CU input, and that the agency will be taking steps to increase credit union input into final rules. Beginning May 1 in Boston NCUA will begin a series of "Listening Sessions" CUs can be part of and share feedback to NCUA.
Outgoing Chair Recognized
WASHINGTON-Outgoing CUNA Chairman Harriet May was honored for her service to CUNA and credit unions during CUNA's Governmental Affairs Conference.
Presenting a lapel pin to May, who is also retiring as CEO of Government Employees CU in El Paso, Texas, CUNA President Bill Cheney termed May a "great leader, and a mentor for me," as well as someone who has "stood tall for credit unions her entire CU career."
May closed out her term by saying it was an honor to serve as CUNA chair, and as CEO of GECU for 16 years. In her last order of CUNA business, May announced that next years GAC will be moved back to February. "We'll hold the meeting February 24 to 28," said May, adding with her typical candor, "For all of you who love this warm weather now, don't blame me. It was not my decision."
Focus On IRR, CUSOs
WASHINGTON-In her remarks to GAC, NCUA Vice Chairman Gigi Hyland took time to explain the agency's focus on interest rate risk and CUSOs. The impetus for those two areas of greater scrutiny, and others, said Hyland, were reports from the agency's own Inspector General and the Governmental Accountability Office, both of which were critical of NCUA's oversight leading up to the financial crisis.
Hyland described the new rules as "guardrails on the roads on which credit unions travel.''
Given that interest rates have nowhere to go but up, Hyland cautioned all CUs to prepare for any market rate increases, including running stress tests. She also urged keeping a tight eye on real estate lending.
Avoid The 'Screaming Monkey'
WASHINGTON-When it comes to influencing legislators through letters, you don't want to be viewed as a "screaming monkey."
That advice was passed along by Bradford Fitch, CEO of the Congressional Management Foundation, during CUNA's Governmental Affairs Conference. Fitch cautioned that the approach of sending repeated messages without a great deal of focus may have worked 10 years ago, but that was before the Internet dramatically increased the amount of messages crossing legislators' desks.
"The challenge is not that congressmen don't want to listen, they just don't have the time," said Fitch. "Congressmen receive 500% to 1,000% more mail today than they did 10 years ago, and they have had no increase in staff."
To work, messages must come from informed constituents who understand the issues and personalize their messages, said Fitch, who shared five rules to follow:
• "Learn about your legislator. Know what committees they are on, what bills they have introduced, and even learn about their families."
• "Be a 'normal expert.' Share that you know enough about the issue so that the legislative assistant will call you and want more information about the issue."
• "Communicate frequently. Build relationships and know who you need to talk to when the legislator is close to making a decision."
• "Have a specific 'ask' that will differentiate your message."
"What is most powerful is sharing a personal story that puts a face to the public policy."
Bank Ads On The Attack
WASHINGTON-At the same time CUNA was sponsoring its GAC, more than 1,000 bankers were also in town for the American Bankers Association's annual Government Relations Summit. While the ABA was complaining about credit unions, another bank group, the Independent Community Bankers of America, was running a series of ads in publications that target Congress that attacked credit unions' tax exemption.
In one ad an illustration of Ben Franklin wearing a clothes pin on his nose was used next to a subheadline that read, "Something doesn't smell quite right."
"If credit uions have the same products as a community bank, why don't they pay the same taxes as a community bank?" the ad asked, urging Congress to "STOP the Tax-Exempt Credit Unions' Power Grab" by voting no on S. 509 and HR 1418.
Romney Vs. Obama To Be Tight
WASHINGTON-Look for tight race this fall between GOP nominee Mitt Romney and President Obama, according to political analyst Charlie Cook. Cook told GAC he fully anticipates Romney will represent the GOP this autumn after having moved further right than he would have liked too, Cook suggested, saying that Romney will now have to dance his way back closer to the middle.
Cook said the 2012 presidential race will be determined by the numbers, such as unemployment and gas prices. As for how individuals should vote later this year, he offered this: "My advice is don't listen to the gas bags on TV," he said. "Do your own research. Stay with the facts and leave the commentary out."
Optimistic About MBL Cap
WASHINGTON-On the same day bankers were massing on Capitol Hill looking to kill any effort to raise the limit on member business loans for credit unions, Sen. Mark Udall (D-CO) was telling GAC attendees he's confident the MBL cap will be raised.
"I am especially proud of the bipartisan support our small business lending bill has garnered. This is a bipartisan, common sense way to create jobs and help small businesses without costing a dime...Your stories are critically important. They put a face on our efforts to get capital flowing again to small businesses. We came very close to passing this bill last Congress. And as we get closer to passing our bill the bank rhetoric gets louder-I think it's because they believe we have the votes to pass this."
Your New 'Best Friend'
WASHINGTON-Credit unions will soon have a very important ally at the top of the House Committee on Financial Services. Rep. Maxine Waters (D-CA) told GAC attendees that with Barney Frank (D-MA) stepping down, she is in line to become the committee's ranking minority member. "When I take that seat credit unions will have the best friend they've ever had."
A co-sponsor of HR 1418, Waters supports all legislation to increase credit unions' ability to make more member business loans. "This is a big issue we are going to win on because we are going to fight to meet the needs of credit unions and American families."
Cutting Compliance
WASHINGTON-Rep. Shelley Moore Capito (R-WV) doesn't want more regulation-or tough regulators-that place additional compliance burdens on CUs that ultimately can drive low-income members to payday services and force the addition of fees to others.
Capito, who chairs the Subcommittee on Financial Institutions and Consumer Credit, acknowledged that she understands compliance costs can come from new rules and from tough examiners. She said that efforts are underway to help drive greater objectivity and clarity around decisions made by examiners.
Gridlock 'Out of Control'
WASHINGTON-The legislative gridlock in Washington is doing very little to help Americans, reminded Rep. Carolyn McCarthy (D-NY). "It's gotten out of control. For us to be doing politics when credit unions need to be helping America is terrible. We have to get this MBL bill passed. I believe in what you are doing and don't be afraid to talk to members of Congress; we are regular people. We need to hear your stories. You are benefiting your communities. You can make a difference."
'You Owe It To Them'
WASHINGTON-Rep. Rob Woodall (R-GA), expects credit unions to do more to help persuade members of Congress to raise the MBL cap, especially after a show of hands showed just one-third are working with elected officials on the issue.
"Come on," shouted Woodall. "I encourage you to get more stories in your newsletters and find ways to get tools to members to make their voices heard. We will succeed with the support of your members. You owe it to them to give them the benefit of your expertise."
Stalemate Hurting Economy
WASHINGTON-The inability of Washington politicians to work across party lines has Rep. Steve Chabot (R-OH) concerned the stalemate could slow economic recovery.
"We have a divided government, so it can be difficult to get things done," said Chabot, citing the Keystone oil pipeline as an example. "We can't do anything about Europe and Greece, we can't control the actions of Iran, but the pipeline is something we can take action on. If gas prices continue to climb as they have, that can take our economy in the wrong direction."
Support For Supp Capital
WASHINGTON-Rep. Brad Sherman (D-CA), who helped to introduce legislation to allow CUs access to supplemental capital, now just wants Congress to "get out of the way" (see related story, page 11).
"We are not asking Washington to find ways to provide capital to credit unions, but simply step aside and allow you to have access to supplemental capital and retain your character as a member-owned financial institution," said Sherman.
Sherman questioned those who would stand against the bill, asking, "When was the last time someone in Washington stood up and said we want more poorly capitalized financial institutions?"
Sherman added that he will continue to help credit unions "play defense" against moves to remove the tax exemption. "Today you have one big advantage over banks, the people you serve actually like you."
