WASHINGTON-The credit union lobby was calculating last week what affects the pending retirements of two Democratic senators, Banking Committee Chairman Christopher Dodd and long-time credit union ally Byron Dorgan, will have on legislation to reform the financial services markets.
The announcement by Dodd, the Connecticut Democrat, that he won't seek a sixth term, is sure to roil the legislative process as the massive financial services reform bill passed by the House just before Christmas moves to his committee in the next few weeks. But the retirement of Dorgan could be just as meaningful for credit unions, according to observers.
"He (Dorgan) was always a reliable vote," said Fred Becker, president of NAFCU. "He was very supportive of co-ops and very supportive of the (credit union) industry," said Becker of the Democrat from North Dakota, where agricultural cooperatives are very influential.
Dodd's support for credit unions, even as chairman of the banking panel, has been less obvious. He recently stated he saw no need to combine NCUA with banking regulators as part of a regulatory consolidation plan. And he also helped move legislation late last year that fixed the 21-day notice controversy in the credit card bill.
The five-term senator was also a big supporter of legislation to reform credit card rules and overdraft protection, which were opposed by credit unions.
Dodd's announcement comes as his committee is poised to take up the historic financial reform bill which would create a consumer financial protection agency, a systemic risk regulator for "too-big-to-fail" financial entities, set new regulatory schemes for financial derivatives and Wall Street ratings agencies, and allow shareholders some say on executive compensation. But there is little in it directly effecting credit unions. That's because the version of the bill passed by the House would probably exempt all credit unions from examinations by the consumer agency and would also exempt credit unions from the too-big-to-fail agency.
"This could cut either way," said one lobbyist who did not want to speak on the record because of his work with Dodd and the committee. "It could either strengthen Dodd's resolve to get the bill passed as some kind of legacy, or it could increase the Republicans' opposition because they know Dodd is a lameduck."
NAFCU's Becker, noting Republican opposition to the bill, said plans for the consumer agency will continue to be a tough sell in the Senate. "Regulatory reform is going to go forward. The CFPA has always been a tough row in the Senate and will continue to be a tough row," said Becker.
CUNA President Dan Mica served with Dodd when the two were in the House in the 1990s. "I have had many occasions to work with him in the ensuing years, both as a member of Congress and as an advocate for credit unions," said Mica in a prepared statement. "On a personal level, we developed a close relationship, for which I am grateful. On a professional level, I have always found him to be open-minded but resolute once he has reached a position. As chairman of the Senate Banking Committee he has always given credit unions fair consideration, which we have greatly appreciated."
Dodd's departure will leave Tim Johnson of South Dakota as the longest-serving Democrat on the Banking Committee, meaning he is in line to be the next chairman under the Senate's senority rules, if he wants to be. Johnson, however, has been physically impaired since suffering a stroke-like seizure a few years ago and it is not clear if he will want to claim the chair of this powerful committee. Johnson has been a strong supporter of credit unions and was the leasing patron of Deborah Matz, who he calls a friend, in Matz's appointment to the NCUA Board on both occasions.
