CUNA Straddles the Line with Campaign Donations
CUNA STRADDLES THE LINE WITH CAMPAIGN DONATIONS
WASHINGTON-Going into the final round of congressional primaries in seven states last week, CUNA was assiduously balancing its political donations, among the biggest of any trade association, between the two parties, the traditional non-partisan lobby be seen as leaning either way.
"We base our support on where a candidate stands on the issues that are important to credit unions and not on party affiliation," said Richard Gose, political director of CUNA, which will spend more on than $4 million this elections of congressional contributions and other campaign activity.
So CUNA has steered clear of efforts by the two parties to win control of the Congress, choosing to put its vast treasury not behind the Democrats or Republicans, but behind the pro-credit union candidates, according to Gose.
The most recent case in point: a $66,000 independent expenditure funding radio ads supporting senate candidate Ovide Lamontagne in the days leading up to last week's Republican primary in New Hampshire based on Lamontagne's 10-year service on the board of St. Mary's Bank, the nation's oldest credit union. Lamontagne's credit union service-he is now chairman of the St. Mary's board-was the driving force behind the campaign and not opposition to any other candidate according to CUNA.
Lamontagne lost a close race to New Hampshire Attorney General Kelly Ayotte.
But CUNA has made special expenditures such as this on behalf of Democratic candidates as well, in the 2008 Maine primary, and most famously on behalf of Democratic Sen. Joseph Lieberman in 2006.
Through the first 20 months of the two-year election cycle CUNA has made almost $2.4 million in campaign contributions, about 58% of it to Democrats and 42% of it to Republicans, roughly equivalent to the percentage the number of seats each party controls in the House and Senate.
This is typical of CUNA's campaign strategy, with the vast majority of campaign contributions, well over 90%, going to congressional incumbents and the remainder to neophyte candidates who have proven themselves credit union friends either in the state legislature or in other ways, such as a pledge of support for the credit union tax exemption.
This careful strategy of non-partisanship is critical to interests like CUNA, who do not want to be seen as favoring one party, especially as control of Congress hangs in the balance.
As the final days of this pivotal congressional primaries wind down, CUNA may play a critical role in several important House races where congressional allies may be in jeopardy. CUNA is sitting on more than $1 million of cash available for special initiatives, like independent expenditures, and if past elections are any guide, is expected to spend almost every penny of it before election day.
BIG CUS CONTINUE ABSORBING TROUBLED SMALLER CUS
ALEXANDRIA, Va.-The trend in credit union mergers continued, with NCUA reporting last week several more troubled institutions are being merged into giant credit unions.
NCUA approved another merger for Wisconsin's Summit CU; for MidFlorida CU; for Aloha Pacific FCU and TwinStar CU. And yesterday Navy FCU announced one of the biggest deals of the year, an acquisition of troubled USA FCU.
The number of mergers continues to decline, despite the growing number of credit unions in financial trouble, a function of the declining number of credit unions nationwide. Through the first seven months of 2010 there were 101 mergers, down from 117 for the same period last year.
Through the end of July there have been 118 credit unions disappear through merger or liquidation, according to CUNA. There were 7,713 credit unions at July 31. That's down from 10,041 at the end of 2002.
NCUA has been picking and choosing winners, merging out the most troubled credit unions into well-capitalized big ones.
Summit CU, which acquired State Central CU earlier this year, was cleared to acquire tiny Dings Employees CU; MidFlorida CU to acquire ailing Bay Gulf FCU; and Aloha Pacific will merge into it Word of Life FCU and TwinStar CU will acquire Renton CU, a one-time $7-million credit union that has lost money each of the past three years.
And Navy FCU, the world's largest credit union with almost $43 billion in assets, said it agreed to acquire USA FCU, another credit union serving its core Navy personnel which had more than $700 million in assets as recently as 2008.
Several other troubled credit unions are being merged out, according to NCUA. They are: Table Rock FCU, Shell Knob, Mo.; Grant County Community FCU, Marion, Ind.; Comala FCU, Montgomery, Ala.; East Central FCU, Louisville, Miss.; Kelly, in Troy, Mich. and Members Choice Pennsylvania, Duboise, Penn.
PUERTO RICO CU IS LATEST FAILURE, 25TH OF THE YEAR
MANATI, P.R.-NCUA last week liquidated Industries Puerto Rico FCU here, the 25th credit union failure of the year, and assigned the assets of the one-time $7-million credit union to nearby Borinquen Community FCU.
Industries Puerto Rico FCU's declining financial condition led to its closure and subsequent purchase and assumption by the $16 million Borinquen Community.
Borinquen Community serves 3,500 members in Aguadilla Municipio, Puerto Rico and is based in Aguadilla, Puerto Rico.
Industries Puerto Rico FCU lost $580,000 for the first six months of the year and had negative net capital, while assets declined to just $4 million.