GAC 2005 Notes
A Small Loan, A Big Story
WASHINGTON-CUNA Secretary and Community CU CEO Don Larsen challenged credit unions to not only tell their stories to lawmakers, regulators and the public but also to live up to those stories. "I remember how we made a $20 loan to a 13-year-old girl for a Father's Day gift for her dad, who was coming from [military service in] Korea. She paid that loan off by paying us $3 a week from her babysitting money," Larsen related at CUNA's GAC, noting how powerful such stories are when trying to explain the CU difference. "But the question is, would you make that loan today?"
Banks 'Can Declare Victory'
WASHINGTON-In an effort to spur vocal support from CUs for the Credit Union Regulatory Improvement Act, CUNA Chairman and Texas CU League CEO Dick Ensweiler suggested the political fallout of a "loss" to the banks is something credit unions simply can't afford. "The bankers know if they manage [to block CURIA], they can lay their chips down and declare victory," Ensweiler told the GAC audience. "Banks will be able to say, 'We can kill bills, we are the power brokers in this town.' They will say [a CURIA defeat] proves that banks are the ones to listen to."
U.S. Rep. Bachus Has A Concern
WASHINGTON-U.S. Rep. Spencer Bachus (R-AL) had much praise for CUs' good work, such as financial literacy efforts and support of the National Child ID program, but he also voiced one concern. "I don't want to see the character of credit unions change. My concern [about changing the MBL cap] is how it will affect your individual members' ability to get a loan for college expenses, for example. Will that money still be there for those kinds of loans?"
Congressman Pitches Tax Proposal
WASHINGTON-The CU tax exemption is hardly the only tax-related issue in town. U.S. Rep. John Lindner (R-GA) called on credit unions to support the Fair Tax Bill, which replaces income taxes, the "death tax" and others with a federal sales tax. With all the loopholes in the existing tax code, "the only tax payer in the world is the consumer who can't deduct and pass off to someone else the cost of taxes," Lindner said. A sales tax is better than a flat tax, he argued, because it ensures that everyone really is paying a share-because everyone's got to buy something.
What If LMCU Had Been An FCU?
WASHINGTON-While most speakers at CUNA's GAC discussed Social Security reform or CURIA, one speaker talked about potential threats to the dual-chartering system. "We believe the dual chartering system brings strength to the movement as a whole, but the dual charter is being challenged in a number of areas," said NASCUS Chairman Roger Little. "Taxation of credit unions based on charter...is just plain wrong."
The dual chartering system isn't just about giving credit unions a means of "escaping" taxation-like the credit unions in Utah did when they fled that state's charter-it's also proved to be valuable in other areas.
Take Lake Michigan CU, for example, said Little, who leads Michigan's CU Division at the Office of Financial and Insurance Services. LMCU attempted to convert to a bank charter, but the CU failed to get the two-thirds majority vote required under state law. "If they had been a federal charter, they would be a mutual savings bank right now," Little observed. "Some say Michigan regulatory standards are too high. Well, you can take that...to the credit union."
Passionate About People
WASHINGTON-In a passionate speech that focused mostly on Social Security reform, U.S. Rep. Chuck Rangel (D-NY) called on credit unions to use their greatest strength-their members-to fight America's greatest foe: the indifference of its own people. "I cannot believe the indifference of Americans to fight back for what they believe," Rangel said. "That is our challenge. Can you imagine the power we would have if your [87 million] members took time out to find their legislators and share their concerns? The power is not in the House or the Senate. It's not with the Republicans or with the Democrats. It's with the people."