Effort To Pass CURIA Will Be Test For CUNA

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This year's renewed effort to pass a regulatory relief bill or a similar initiative being called CURIA (CU Regulatory Improvements Act) will be a big test of CUNA's long-sought clout on Capitol Hill.

The national trade association's efforts to cultivate influence in Congress with millions of dollars in campaign contributions to both parties and regular "Hike the Hill" visits from congressional districts has shown mixed results so far, other than to raise CUNA's and credit unions' visibility in the nation's capital.

Seven years later, efforts to pass a bankruptcy reform bill continue to founder, despite an all-out blitz by the credit union lobby. While the credit union trade groups, especially CUNA and its state leagues, can be credited with doing a lot of the heavy lifting to bring the bill near the finish line, the bill has yet make it all the way to the end-the only determinant of success in this business.

And last year's two major legislative triumphs for the financial services industry, the renewal of the Fair Credit Reporting Act and the Check Truncation Act, or Check 21, were passed with little input from CUNA or the other credit unions trades, despite their insistence otherwise. Both bills were well on their way to passage before the credit union lobby got involved and would have, in fact, passed without credit union participation.

So what does CUNA have to show for the almost $10 million in political spending and campaign contributions and the millions of lobbying expenses it has incurred over the past four election cycles?

Well, the major accomplishment, for which the credit union lobby is still patting itself on the back, is HR 1151, the 1998 CU Membership Access Act. This law, however, as shown by the new efforts at regulatory relief, has proven to be as much of a hindrance as an enabler. In fact, much of the regulatory relief bill and the CURIA initiative are aimed at undoing what HR 1151 did. That includes reforming the strict limits on business lending enacted by HR 1151, amending the minimum capital standards included in the law, and the various restrictions on field of membership passed in the bill.

And the main aim of HR 1151, to facilitate FOM expansion through the addition of multiple groups, has been rendered largely irrelevant through the proliferation of community chartering. More than 500 federally chartered credit unions, and a greater number of state charters, have bypassed the new multiple group allowances and opted for a community charter, instead.

All the while, CUNA continues to battle red ink, having reported financial losses in four of the past seven years.

So, as one industry lobbyist noted, CUNA badly needs a victory this year to validate its strategy and political spending.

Of course, I would be remiss in this discussion if I did not mention the support among lawmakers CUNA and the credit union lobby has built up for the maintenance of the federal tax exemption. This is no small matter, as the tax exemption is estimated to save credit unions as much as $1.5 billion a year. However, it's hard to determine how much of the support is due to the work of the credit union lobby, and how much is due to the anti-tax stand of the Republican Party, which continues to control Congress. We'll never know unless someone introduces a tax bill.

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