The consumer lobby met here last week to set a financial services agenda for the next Congress and left a new opening for credit unions to regain some of the lost comity they had with the groups over the bankruptcy reform bill.
The Consumer Federation of America, a broad coalition of consumer groups, set a number of ongoing legislative initiatives among its top priorities, including predatory lending, payday lending, bounce protection, credit card pricing, check-holding periods and credit card interchange fees.
The agenda, set last week at the CFA's board meeting, will give credit unions many opportunities to reestablish itself firmly in the consumer lobby, some of which was upset over the credit unions' leadership in the fight for bankruptcy reform, which was universally opposed by the consumer groups.
Mark Wolff, spokesman for CUNA, which has a permanent seat on the CFA Board as a charter member, acknowledged the split but denied any kind of a permanent rift. "There are many issues which we agree on, but there are some which we don't agree on, and the bankruptcy bill was just one of those," said Wolff.
The group appeared buoyed last week by the prospects of a Democratic-controlled Congress as it prepares its lobbying plans for the 100th Congress. "The CFA feels there will be more opportunities for positive legislative initiatives and that they will spend less time defending against legislation that they disagree with," said Wolff.
Travis Plunkitt, chief lobbyist for the CFA, said there will be many opportunities for credit unions to take the lead on consumer issues in the next Congress. Among them are the effort to pass a national bill setting standards on subprime mortgage loans, generally called predatory lending. Plunkitt said there is widespread support among the new Democratic leaders in the House and Senate for a law modeled after the North Carolina bill, that was drafted in part by representatives from Self Help CU and State Employees CU, which caps upfront fees and requires lenders to consider suitability when selling mortgage products.
Efforts to rein in predatory lending is also another area where credit unions have taken the lead in recent years, such as the new statewide program in Pennsylvania, and could serve as a model for a national scheme, suggested Plunkitt.
But other priorities may cause a pause among the credit unions.
For example, the CFA is expected to lobby in favor of a bill that would shorten the hold times for checks because of the new Check 21 electronic checking law. "That's definitely going to be a priority for us," said Plunkitt. The credit union lobby was unenthusiastic about the bill when it was introduced in this Congress, joining the bankers in saying there needs to be more time to study the affects of Check 21 in order to determine whether holding periods should be shortened.
Credit card fee and charges, will also be a top priority, said Plunkitt. He said the consumer groups will seek to rein in some of the common practices of credit card companies, like high late fees, retroactive interest charges, and Universal default, with which a cardholder may be charged a higher rate because of a default on a prior loan.
The consumers groups will also seek again to expand disclosures, providing among other things, an estimate as to how long it will take for a cardholder to pay off his credit card at the current rate of payment. This proposal was defeated several times during the debate on the bankruptcy bill.
"The truth is, the pressure seems to be building on the credit card industry to eliminate abuses and provide greater disclosures," he stated.
The credit union lobby has opposed greater disclosures in the past, saying it would add significant expenses without providing similar consumer protections.
Dean Sagar, a congressional lobbyist for CUNA, said CUNA would not necessarily be against some of the proposed credit card reforms because credit unions do not generally engage in some of these practices. He referred to some of the targeted credit card practices as "entrapment" and said "credit unions are not set up to entrap their members." He added that CUNA is not against additional disclosures "as long as they're not unreasonable of unfair." The consumer groups will also support congressional efforts to investigate charges that MasterCard and Visa USA have manipulated the multi-billion dollar market on interchange on cards transactions to see if consumers are being harmed, according to Plunkitt.
