WASHINGTON-Efforts to create a new consumer regulator, develop new rules for operating the financial markets and a host of other responses to the financial crisis will leave credit unions on the defensive this year, the second session of the 111th Congress.
"Sometimes getting things done is stopping things from happening," said Ryan Donovan, senior lobbyist for CUNA, of the group's efforts to limit the impact of legislation rolling through Congress on CUs.
For CUNA and the leagues that will mean working to limit the effects of the proposed consumer financial protection agency on credit unions, making sure the massive bill the agency is part of has few other impacts on credit unions' ability to make loans, investments and govern themselves and on retains the independence of NCUA, as lawmakers consider combining several of the banking regulators. "We hope that whatever the Senate does, it doesn't make it harder for credit unions to serve their members," is how Donovan summarized CUNA's goals as the omnibus financial regulatory reform bill passed by the House last month moves over to the Senate.
CUNA will also be on the defense when it comes to efforts to develop new regulations for overdraft protection; regulate credit card interchange fees and apply the Community Reinvestment Act to credit unions.
The credit union lobby is also vigilant about the so-called cramdown provision, the proposal that would allow troubled homeowners to ask a bankruptcy court to amend the terms of their mortgages that CUNA and NAFCU were instrumental in killing before. John Magill, chief lobbyist for CUNA, said he is confident last month's defeat of the cramdown provision in the House should kill it once and for all.
But, he pointed out, there is still some support in the House and Senate for the controversial measure, so CUNA will continue to work to dissuade lawmakers on the proposal. The defensive posture will leave little time for CUNA to take the offense on certain priorities, like the perennial effort to get the cap lifted on member business lending. A new bill introduced in the Senate would double the cap from the current 12.25% of assets to 25%, but similar attempts to expand credit union business lending have failed at least 10 times in recent years, since the current cap was introduced as part of HR 1151, the 1998 CU Membership Access Act.
Magill said CUNA believes the current economic crisis and efforts to stimulate the economy may pose the best chance to finally get the cap lifted. "We hope the jobs bill will be a great vehicle," said Magill. "This is at no cost to the taxpayer. It just seems like a natural opportunity," he added. CUNA also hopes to get legislation introduced that would expand credit unions' abilities to raise alternative capital, another issue that has been floating around for a decade.
While CUNA and NAFCU have agreed at a general outline for such a proposal they are still waiting for NCUA to weigh in on the details. Once NCUA provides its parameters for alternative capital, the hope is to get it endorsed by the Treasury Department, whose opinion will be critical when it goes before Congress. "We need to get some ducks in a row," said Donovan.
