CUs Court New Administration, Congress With Reforms As Stimulus

WASHINGTON–There’s no question where the new Congress’ and the Obama administration’s legislative priorities will lie–economic stimulus. The question is how credit unions can demonstrate that some of their pet projects, such as lifting the cap on member business lending and capital reform, fall right in line with those priorities.“The Obama administration’s priorities for 2009 will be economic stimulus right off the bat,” said Ryan Donovan, CUNA’s VP- legislative affairs. “What credit unions need to do to be successful is to make their priorities relevant to Congress. They’re looking at economic stimulus, we’re looking to lift the caps on member business lending, and in this economy there is a need for more business lending. This is something that doesn’t cost the taxpayers a dime and is exactly the type of economic stimulus Congress is looking for to balance the spending initiatives.”Dan Berger, NAFCU’s SVP-governmental affairs, agreed, noting that capital reform for credit unions is another such issue that would allow for additional lending and would stimulate the economy without any cost to taxpayers. “We are starting to get some positive traction on that,” he added.Another big issue expected to be taken on early by the Obama administration and the new Congress is regulatory restructuring and/or consolidation.“In 2009, what doesn’t happen will be just as important as what does happen,” Donovan said, noting that credit unions do not want to see NCUA or the National CU Share Insurance Fund consolidated in any way.“We have seen no indication from anyone about merging NCUA or the insurance fund,” Berger said. “But that is something we are keeping an eye on.”In line with the idea that “what doesn’t happen will be just as important as what does,” some of the pro-consumer reforms being considered could end up hurting credit unions, even though they are largely pro-consumer themselves, Berger noted.“Some of the credit card reforms, overdraft protection reforms, these are aimed at things that credit unions already don’t do,” he explained. “But there are some bad actors out there, and the efforts to rein them in could spill over onto the white hats. New disclosures, for example, could add unnecessary burden for credit unions.”Another top priority for Obama and Congress in 2009: preventing home foreclosures. Though lawmakers enacted a major bill designed to do just that, and federal regulators have talked about doing more, little has stemmed the tide of foreclosures, which could reach 10 million over the next five years.