The credit union lobby was discussing last week an offer from lawmakers to separate the credit union provisions from the banking ones in the omnibus regulatory relief package that will be reintroduced in the House any day.
The offer has its advantages and its drawbacks.
For one, if they split the credit union provisions and make it a stand-alone bill, then credit union lobbyists can focus solely on their priorities. That would allow them to cultivate the broad base of support they have worked so hard over the past few years to build in getting the bill passed. This way the bill would not be complicated by the banker provisions, which usually take several congresses to pass, not unlike bankruptcy reform legislation. A separate bill could also allow credit unions to expand and add more provisions, one credit union lobbyist pointed out.
But a stand-alone credit union bill would give the bankers an easy target at which to aim, as they have vowed to do. In fact, the American Bankers Association made it clear last year that they would not support the regulatory relief package because they opposed the credit union provisions. The other banking lobby groups were not so definitive, though they expressed opposition to some of the credit union measures in the package. To separate the credit union provisions into another bill would allow the bankers to work in unison for its defeat without necessarily jeopardizing their own regulatory relief agenda.
Of course, lawmakers are not so dim as to allow the bankers to kill a credit union bill without also taking close aim at the banking bill. The credit union lobby has built up enough friends in Congress who would not allow that to happen.
This trial balloon sent up by the House Financial Services Committee in separate meetings with the different lobbies was apparently deflated early on. It appears that a regulatory relief package will only fly as a multi-interest bill, requiring the cooperation of the different interests.
The credit union lobby, however, is apparently working on different options that could carry one or more of their priorities if the regulatory relief measure does not come to pass. Among them are a separate bill being considered by Rep. Bob Ney (R-OH), who is emerging as a power on the Financial Services Committee, that would offer several of the provisions also in regulatory relief. It is not clear at this point whether Ney will introduce his bill if the regulatory relief package appears to be in good favor.
Several other bills are expected to provide potential vehicles for some of the credit union provisions, like the allowance of privately insured credit unions to join the Federal Home Loan Bank System, the easing of member business loan restrictions, or the ability of federally insured credit unions to offer secondary capital accounts. Among them are the reintroduction of a deposit insurance reform bill or the reauthorization of the Fair Credit Reporting Act, which is scheduled to expire at the end of the year. It is entirely conceivable that if regulatory relief is not passed then one or more credit union goodies could be added to one of those bills.