GOP House To Staunch Financial Reform

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WASHINGTON – If the Republicans win back control of the House of Representatives in today’s elections, as is widely expected, credit unions can expect a more temperate climate on Capitol Hill, even efforts to roll back some of the financial reforms enacted by an activist Democratic Congress the past two years.

Most congressional observers agree that will mean fewer of the types of bills that affected credit unions, such as the tighter standards for credit cards, overdrafts and mortgages, and maybe a rollback of some of the provisions of the financial reform bill. John Magill, chief lobbyist for CUNA, suggested that a return to a GOP-controlled House could mean a more pro-business and de-regulatory environment, where credit unions would be less likely to see new reforms.

If the Republicans win control of the House, it would probably mean that Spencer Bachus, a nine-term Republican from Alabama, will become chairman of the House Financial Services Committee, replacing liberal Boston Democrat Barney Frank.

Bachus, one of just six House members to vote against HR 1151, the CU Membership Access Act, has become a strong credit union supporter since then, according to Will McCarty, congressional lobbyist for the Southeastern League of CUs who once worked for Bachus. “There’s a lot of things that have happened since then,” McCarty told Credit Union Journal yesterday. “We’ve built a very good relationship with Congressman Bachus. He’s always willing to meet with us and always listens to us.” Bachus is among the Republican leaders who have openly suggested rolling back some of the financial reform bills. He also wants to move rapidly to wind down Fannie Mae and Freddie Mac.

In the other House committee most important to credit unions, the tax-writing Ways and Means Committee, Michigan’s David Camp, a close ally of the Michigan CU League, is expected to become chairman of the committee if the Republicans win the House. And right behind him in seniority would be California’s Wally Herger, for who CUNA’s Magill was a top staffer for many years. The panel is important to credit unions because if Congress were to consider repealing the credit union tax exemption it would have to pass the Ways and Means Committee.

Political analysts widely expect the Democrats to retain control of the Senate for the next Congress. With the departure of Connecticut’s Christopher Dodd after five terms, Tim Johnson of South Dakota is expected to become chairman of the Senate Banking Committee. Johnson, who was partially incapacitated by a stroke, said he plans to seek the chairmanship.

CUNA’s Magill said with control of the Congress split, it may be a good opportunity to seek legislation that is bipartisan in nature because it will be easier to achieve, such as an increase in the member business loan cap, or even capital reform for credit unions.


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