Every year, as credit unions gather in Washington for CUNA's Governmental Affairs Conference, CU Journal asks all of the state league's to answer one question related to credit unions and politics. This year's question:
What sorts of direction and questions have you gotten from lawmakers regarding the national, regional and local financial services market over the last year, and how have you responded?
Arizona: Lawmakers Take Notice
PHOENIX, Ariz.-If there is any silver lining to the Great Recession, Arizona credit unions have reinforced their "white hat" image and Arizona lawmakers have taken notice. On the state level, lawmakers have praised us for remaining healthy, while continuing to be consumer friendly. It isn't uncommon for state lawmakers to tell us that our credit unions are the best-kept secret. From that standpoint, credit unions have not only been touted, but our local political influence has also grown. On the federal level, our lawmakers have also recognized the positive role of CUs. Proposals such as member business lending specifically aimed at increasing credit unions' ability to improve member options and economic conditions are the focus of the conversation.
With that said, several other proposals aimed at banks do not necessarily need to, but unfortunately by default include and affect credit unions. While it is not the intent to harm CUs specifically, these proposals don't take into account the negative effect they would have on an industry that didn't cause the crisis and continue to play a positive role in economic recovery. Overall, Arizona CUs have been on the right track long before the current financial services market, it's clear though that our lawmakers have more recently taken notice.
Calif./Nevada: An IOU for the IOUs
RANCHO CUCAMONGA, Calif.-Lawmakers from California and Nevada are supportive of credit unions' role in helping to restart a stalled economy, where job creation is the prevailing issue and the unemployment rate is among the highest in the nation. At the federal level, our members of Congress have been made well aware of the importance to credit unions of raising the cap on member business lending as a means to create thousands of jobs to help spur economic recovery. On the state side, CUs are working with legislators to advocate against bills that would negatively impact our efforts to help consumers during these difficult economic times. And as California faces cash shortfalls and the potential for a prolonged budget impasse, lawmakers in that event would once again look to credit unions to honor state-issued IOUs and Registered Warrants for workers, long after banks have refused to accept them.
Colorado: 'Let Us Help'
DENVER-Most lawmakers know that credit unions were not "part of the problem" - we didn't have a hand in greed and corruption that created the financial crisis that America has suffered-but many of those officials ask "what can be done to avoid such a calamity in the future?" Our answer is simple - on both a national and state level - "let credit unions be part of the solution." That means allowing us to again expand member business lending; giving credit unions access to public deposits at the state level; keeping credit unions out of well-meaning but burdensome new laws and regulations such as CFPA, systemic risk, mortgage "cram-down" schemes and a host of other well-meaning ideas that simply should not apply to CUs.
It means recognizing and celebrating credit unions in their attempts to help our members - not scam them - through financial education programs like FoolProof, which credit unions have now put into 30% of the Colorado high schools and which has been embraced by 11 other leagues. It also means that our lawmakers shouldn't pick "winners and losers" by supporting Walmart and other mega-merchants in efforts to change the rules of the game on interchange fees, or give still more taxpayer funds to bankers-both large and small - without regard to helping credit unions that bare no blame for the Great Bank-Driven Recession of 2009. In short, our answer is simple - we can help, if you let us do so.
Connecticut: 2 Areas of Focus
MERIDEN, Conn.-The Credit Union League of Connecticut, with the assistance of our members, is discussing legislative issues and how they will affect both credit unions and their member/owners. The two issues that have been asked about the most by our legislators the most are the recently introduced Overdraft Protection Act and Member Business Lending (MBL). We have told our legislators that the Overdraft Protection Act is a comprehensive consumer protection bill that we believe will be an excellent tool for those who need protections from unscrupulous and predatory financials.
Unfortunately, some of the provisions as they are currently written will create unintended problems for CU members. Specifically we are very concerned with the provision of the proposal that would limit overdraft protection plans to one transaction per month or six transactions per year, which many members depend on. In response to questions about MBL, we are telling our legislators that we would like to see an increase in MBL in the very near future. In Connecticut there are very few credit unions who are lending to businesses, but many would like to and could do so safely and soundly if the cap were raised.
Delaware: CUs in the Conversation
NEW CASTLE, Del.-We have had in depth conversations with our lawmakers on the underserved, taxation, overdraft protection, the recent Credit Card Act, and member business loans. Obviously we continue having conversations on regulatory reform and will continue that effort. We are always geared up to any effort aimed at aiding small business and getting credit unions included in any conversation, policy, or initiatives that include small business and the financial community. Our lawmakers are from both sides of the aisle but they get it. They stay plugged in to what is happening at home and have indeed asked for our help, supplying information and materials in their effort to better understand CUs.
For years, we have had a decent relationship with our national law makers. They do not always agree with our stances but they have been generous with their time. One major concern with this upcoming year is the possible shift in the state's national representation. Sen. Joe Biden has vacated his seat for the vice presidency, thus leaving a spot open that may go Republican with a well-known representative moving to take that spot. That leaves the vacated representative's seat. That could be could be a fairly open race.
We have 200,000-plus members locally. Our state has had it's share of downsizing, outsourcing and firings due to plant closures. We have seen the face of start-ups and small businesses and the struggle for capital. They are our members and to have our government exclude them from any real program to assist them is unsettling.
Florida/Alabama: Seeing the Light
TALLAHASSEE, Fla.-The League of Southeastern Credit Unions is in a unique position as we have six lawmakers, including the ranking Republican, on the House Financial Services Committee and the ranking Republican on the Senate Banking Committee. We make sure that we stay close with Rep. Bachus and Sen. Shelby on the issues. In Florida, the questions are from the perspective that the legislators have not been hearing stories about credit unions struggling and that the press we've gotten-the Wall Street Journal featured Florida credit unions last summer-has made an impact on their thinking. This has been an opportunity to talk about CUs being more safe and sound and that we're subject to higher capital requirements than banks. We are ready and willing to increase loans to our members to help their small businesses.
In Alabama, our lawmakers are justifiably concerned about the economic conditions and the effect on financial services and how it affects people. We continue to hear that credit unions are seen as a bright spot and we are capitalizing on this view. The Birmingham News recently ran an article on how Birmingham credit unions are outperforming banks. The message pointing out the credit union difference may be seen in brighter contrast now. It's nothing new and credit unions are succeeding because they are true to their mission. We want to ensure that the extremely positive image that credit unions have gained recently continues after the current economic turmoil subsides.
Georgia: Hike at Home
DULUTH, Ga.-Since Georgia led the nation in bank closures during 2009 our lawmakers were concerned about any difficulties financial institutions experienced during the year. They also were very aware that most of the problems were in the for-profit sector and not with Georgia credit unions. In 2009, we met with legislators in DC and in their local offices in a program we call "Hike at Home." Over 385 advocates from 64 CUs took part in the program. There were 20 "Hike at Home" events in 2009; four with U.S. Congressmen and 12 with state legislators. During the meetings, advocates made sure that lawmakers were well informed about the efforts of credit unions in serving the needs of Georgians and the willingness of CUs to help consumers weather the tough economic and financial times. Georgia lawmakers have remarked that if more institutions acted like CUs then some of the financial services issues probably wouldn't have happened. As a result of these meetings, we find that many lawmakers now have a better understanding about our health, the issues facing the movement, and our position on issues.
Hawaii: Stressing Why Capital Exists
HONOLULU-Hawaii credit unions have largely retained a strong capital position to better serve and protect their members' interests. While only four in number, our congressional delegation is well informed of developments, positive and adverse, in financial services markets, particularly Sen. Daniel K. Akaka, a member of the Senate Banking, Housing and Urban Affairs Committee. Our senior senator, Sen. Daniel K. Inouye, has met with us a number of times to discuss his concerns with financial markets and services in Hawaii, particularly from his perspective as Chairman of the Senate Appropriations Committee.
We have put forth a strong appeal for congressional support to increase member business lending in Hawaii as a means of protecting and creating jobs, and to strengthen small businesses. The congressional delegation also recognizes our concerns with overdraft protection, mortgage cramdowns, maintaining an independent regulator, and the healthy balance that needs to be achieved between consumer protection goals and financial services reregulation. As in other jurisdictions, our state and county lawmakers are searching for revenue to make up large shortfalls in public funds. There is a perception that CUs are in a better financial position than other non-profits, and it takes a significant continuing effort to keep lawmakers focused on our philosophy, purpose, structure, member service, and communitywide benefits rather than on the financial resources prudently accumulated over many years to better serve members.
Idaho: What's Being Asked
BOISE, Idaho-The questions we have received from federal and state lawmakers have included:
• "How has this economy impacted your credit unions?" Our answer has been that our credit unions are impacted any time something affects their member/owners. When members lose their jobs or have financial struggles, it-of course-affects our credit unions. The delinquencies and charge-offs have increased somewhat as a result of the economy. Lending has been down for some, as well. However, each CU and their membership are unique so there is no real "pat" answer that applies to each CU the same way.
• "Are your credit unions having the same problems as the banks?" Response: Our credit unions didn't get involved in the sub-prime lending area, so we haven't had the same fall-out from that as have many of the banks. And we haven't been anxious to take TARP funds.
• "What is happening now at your credit unions in this market?" Our answer: We have been getting more deposits and new accounts due to the positive message in the national media. Even here at the league we have fielded calls from consumers looking for a credit union to join because of what they are hearing on television and reading in the national papers. The good news that we have always known about and shared about credit unions is making it on many of the financial programs.
• "What are credit unions in Idaho doing to help consumers during this economy?" Our response is that we are doing what we have always done. We are providing low-cost financial services, financial education, and continue to have the best interest of our members as we develop products and services.
Indiana: Consistent and Clear
INDIANAPOLIS-Throughout 2009, the Indiana League was regularly in contact with legislators-especially those in Congress-communicating with them about the vital role credit unions could play in helping the economic recovery in their communities. The league visited Washington five times with groups of varying sizes, with most trips including CU reps from around the state, to meet with our congressional delegation. We focused much of our attention on the fact CUs did not participate in the financial services practices that led to the economic crisis and on expanding the opportunity for credit unions to make loans to the small businesses in their communities. We emphasized in our meetings that Congress needs to be careful as it addresses abuses in the marketplace, not to pass laws that hurt credit unions' ability to serve their members, and continue to provide critical services in a consumer-friendly way.
Nearly all of our congressmen invariably ask the credit unions from their district their views on how the local economy is fairing day to day. In our visits with legislators, CU leaders nearly always had the opportunity to offer examples about how they are serving members, especially those who may have lost longstanding loans or lines of credit at banks. Our message to Indiana legislators has been consistent and clear: raising the member business lending cap could lead to billions of dollars in new small business lending that could create more than 100,000 jobs nationally at no cost to taxpayers.
Iowa: The CU Model Stands Out
DES MOINES, Iowa-Most of the questions we've received from lawmakers aren't focused on the "how did we get here?" We think our credit unions and the Iowa Credit Union League have done a good job explaining to policymakers that CUs did not contribute to the mortgage crisis and resulting economic hardships. In fact, we've worked hard to tell Iowa lawmakers that the cooperative, not-for-profit model that we work under has been a shining example of how credit unions, looking out for their members' best interests, stayed away from the subprime lending practices that caused much of the problems.
As a result of our prudent lending practices, Iowa credit unions have remained well positioned to continue making small business and mortgage loans to our members-when many banks in Iowa have shut off access to capital for Iowans in need. This story has been a key part of the message to our congressional delegation when we discuss the need to raise the member business lending cap. CUs have acted appropriately, not taken excessive risk, and aren't motivated by extremely large bonus payments to senior staff and stock options. Out of these difficult economic times, the CU model has stood out as the model best serving Iowans-and we've tried to make sure policymakers understand that.
Kansas: Sharing Real Stories
TOPEKA, Kan.-In Kansas, as in other states, we are concerned about how financial services providers are meeting the needs of constituents. The ability of consumers and businesses to have access to lending through healthy, well-capitalized financial institutions is front and center as a way to fuel economic recovery. Legislators' questions focus on how credit unions can continue to lend and what is needed to ensure the proper level of oversight and regulation. They understand that federal legislation translates into regulatory burden that eventually increases costs to consumers, either through decreased access, increased fees, lower savings rates, or higher loan rates.
Kansas legislators appreciate the value of locally operated and locally owned CUs and the role they play in consumers' search for businesses that have a vested interest in their community. That equates to trust in the minds of their constituents. During testimony before both the Kansas House and Senate financial institutions committees, we shared stories like that of Cessna Employees CU, whose sponsor employee group has laid off over 50% of their workforce over the past two years, and how they have worked with laid-off members to ease their financial stresses. At our 2010 Day at the Capital, 160 credit union employees and volunteers provided lawmakers with state-specific data which shows that credit unions in Kansas are well-regulated, well-capitalized, and are still making consumer and business loans to their member/owners.
Louisiana: Grassroots Emphasis
HARAHAN, La.-Over the last year, Louisiana CU professionals and volunteers have increased grassroots efforts more than ever. As a result, our delegation has been exposed to the many issues CUs are facing because of current conditions. The Louisiana delegation continues to be an avid supporter of the movement and believes that CUs are beneficial to the American consumer.
Maine: Tangible Examples
WESTBROOK, Maine-In the past year, the bulk of the questions we have received from lawmakers focus on two, primary topics: availability of liquidity, and what are we doing to help consumers who are struggling? As a result, we have had the opportunity to reinforce the efforts of CUs through testimony on legislation, in-person discussions and printed materials. Through all of these resources, we have provided valuable information, such as the fact that Maine credit unions made 15,000 loans of $2,000 or less last year, and offered tangible examples of the value CUs provide consumers through rates, fees and services.
Nationally, our message has been similar but much of the focus has been on member business lending and the impact that raising the cap on MBLs would have on the ability of CUs to help small businesses that have fallen victim to the tightening or cutting off of credit by other financials. Our efforts and communications helped lead to both of our Senators, Olympia Snowe and Susan Collins, be among the seven, initial co-sponsors of legislation in the Senate that would raise the cap on MBLs. As we move forward, Maine's CUs are well-positioned as sound financial institutions that will be remembered by national, state and local leaders for developing a number of creative programs to provide valuable assistance to members during a period of great need.
Maryland: Promoting Literacy
COLUMBIA, Md.-Locally, lawmakers are focused on the prevention of another financial meltdown by supporting programs that both encourage Marylanders to save their money and mandating courses that teach people to be smart about how they spend their money.
Maryland credit unions have been involved in the Governor's Task Force on Financial Literacy with a focus on adult initiatives. Maryland lawmakers have also introduced legislation mandating a high school graduation requirement for a course in financial literacy. Given Maryland's budget problems, the sticking point for any financial literacy initiative is going to be the cost of implementing program. The governor is also concerned that many borrowers eligible for "lender loss-mitigation" programs designed to keep borrowers in their homes are still being pushed into foreclosure. The governor responded with a bill mandating a 45 day period between the Notice of Intent to Foreclose and the filing of the Order to Docket where the lender must make a good faith attempt to reach out to the borrower to try to mediate a solution. Credit unions again, are not part of this problem, and are already working will all cooperative borrowers to help keep them in their homes.
In furthering our Community Outreach activities we are focused on providing access to financial literacy information. Specifically we are printing a special financial literacy supplement in the Washington Examiner in February that will reach over 500,000 readers in the Washington Metropolitan Area, including Hill offices. We are also sponsoring two major financial literacy events that are free to consumers: Money Power Day in Baltimore on March 13 which drew 1,500 participants last year, and the inaugural Dollars and Sense Expo (DSE) in DC on March 6. The programs include free tax preparation, free credit report reviews, youth activities and workshops on a variety of financial topics.
Massachusetts: Talking MBLs
MARLBOROUGH, Mass.-Our lawmakers let us know that their priorities are those of Main Street not Wall Street. They are interested in hearing from us how credit unions are going to help improve the lives of the people they serve. This fortunate position for us as this is the cornerstone of our industry and the heart of our message. The area of most frequent discussion surrounds member business lending. The focus on Main Street gives us the opportunity to showcase situations where credit unions have been able to assist small business owners who have had their credit lines cancelled or cut by major banks, many of which have received bailouts.
Our interest in helping these individuals fund their businesses and create jobs goes directly to the concerns lawmakers our lawmakers are expressing. We are also making the point that our credit unions are in the forefront of public/private partnerships in neighborhoods and cities that many of the large national and international banking conglomerates are exiting. Credit unions are working with community groups, reaching out to consumers and sponsoring events in a way that is becoming increasingly visible.
Michigan: Helping Create Jobs
LANSING, Mich.-The biggest opportunity facing credit unions in the current political environment is to expand their small business lending. By this, we don't mean participations in large, out-of-state commercial loans that are more like investments than MBLs. Half of all jobs come from small businesses. When Gov. Jennifer Granholm called the league to see if credit unions could partner with the state on small business lending, our CUs responded within two days with pledges of over $40 million.
We now have plans to partner with the state's Small Business Technology and Development Center (MI-SBTDC). These networks exist in every state. Our governor mentioned this in her State of the State address and the Small Business Financing Alliance began to take shape. During the next 90 days, the MCUL and member credit unions will create a framework for channeling small business loans to credit unions from small business owners and entrepreneurs who complete an intensive 10-week FASTTRACK training program at one of these SBTDC regional centers. Credit Unions will gain access to a pool of prepared and lower-risk business owners looking for capital.
This is great exposure for credit unions as we seek to raise the cap on small business lending with Congress. Everything right now is about jobs. Small business lending will fuel jobs for credit union members who have been laid off by the economic tsunami sweeping through Michigan and the rest of the country. This is good politics, good business and good service for credit unions and their members.
Minnesota: Consistent Reminders
ST. PAUL, Minn.-In light of the turbulent economy and amidst talk of bank failures and bailouts, the financial services industry has, no doubt, been on the minds of elected officials often over the past year. Minnesota CUs and the Minnesota Credit Union Network have worked hard to uphold public confidence and reassure legislators that CCUs are safe, sound and secure - and federally insured up to the same levels as banks. We consistently remind lawmakers that credit unions provide essential services and products to consumers in every corner of the state.
While Wall Street is being criticized for irresponsible lending, we have delivered the message that credit unions are strongly positioned to lend to members on Minnesota's Main Street. Never has CU philosophy been more relevant as the industry helps consumers ensure their own financial health and well-being. The Minnesota legislature has convened for the second half of the 2009-2010 biennium session and wasted no time in what is unofficially called the "short session" meeting with credit unions seeking insight and support on the Homeowner-Lender Mediation Act, which would create a process for financial institutions entering into mediation with borrowers in foreclosure. This legislation was the focus of much grassroots activity last session, and MCUN staff worked extensively with elected officials to reduce the legislation's scope and negative impact on credit unions.
The meeting not only demonstrates the value elected officials find in the credit union perspective, but it also provided another opportunity to remind legislators of credit unions' efforts to work with members experiencing financial troubles. Despite the many weighty issues facing state and federal lawmakers, the message of cooperation and collaboration persists. Both legislators and CUs have pledged to work together to find a solution to whatever problems lie ahead.
Missouri: Three Questions Asked
ST. LOUIS, Mo.-In Missouri, U.S. representatives are asking CUs and the league about the accessibility of lending, the price of overdraft protection, and how the recession has changed CU operations. Credit union officials reiterate that CUs have money to lend, but the member business lending cap limits lending to only 12.25%. Statistics and data that show how many new jobs and capital could be pumped into the U.S. economy - without using taxpayer's money - is also presented.
One congressman asked a group of CU reps if overdraft protection coverage is rising. The CU spokesperson pointed out that although the overall dollars in Missouri are increasing, that's a direct correlation to how many more people are taking advantage of the service - CU fees were unchanged. CUs communicate that in Missouri this shows how consumers are struggling to make ends meet in a challenging economy.
The recession has impacted credit union operations in this state because increased legislation and regulation intended to correct the abuses of the major players in financial services have been forced on credit unions. CU reps end all legislative meetings with the fact they did not contribute to irresponsible banking practices and therefore they shouldn't be punished by blanket financial reform. Credit unions are safe and sound and just want to serve their members.
Montana: CU Opinions Sought
HELENA, Mont.-In Montana our lawmakers have the many of the same concerns as those from other states: the economy, jobs, and healthcare top the list. During this tumultuous time, we have taken the opportunity to thank lawmakers for programs that have assisted credit unions in their lending efforts ("Cash for Clunkers" and extension of First Time Homebuyers Program). We've talked about jobs creation through member business lending relief and we've stressed the CU difference. This year, in particular, lawmakers have sought out our opinions on issues related to financial services.
Nebraska: Citizens Are Upset
OMAHA, Neb.-During discussions with our lawmakers, they have indicated that Nebraskans are upset with big banks and Wall Street over TARP and excessive compensation. We have been reminding lawmakers that credit unions have been conservative lenders in the market place and that they did not cause of the financial crisis. We have utilized this opportunity to promote the safety and soundness of CUs with lawmakers, members, and the general public. This financial crisis has demonstrated the strength of our charter and the security that it provides to members across the country.
New Mexico: Tours & Town Halls
ALBUQUERQUE, N.M.-The CU Association of New Mexico has been available during our state legislature and in Washington to increase awareness of CU achievements and their mission, and have held a series of town halls around New Mexico to bring together lawmakers and the credit unions that serve their constituents. At the town halls, legislators heard the concerns and questions of our CUs and how credit unions are helping members in the legislators' own districts. They heard how methods such as REAL Solutions help members hard hit by the financial climate become more fiscally fit. Upset with the bailouts of out-of-state banks, state legislators are interested in ways to invest state funds in local financial institutions. CUANM is engaged on the issue and strongly supports legislation that would do that. We have successfully communicated that credit unions weathered the recent financial storm without taxpayer help. We met with all five New Mexico lawmakers during Hike the Hill and discussed how the proposed overdraft protection legislation would have negative consequences for credit union members. We also worked successfully toward sponsorship of member business lending legislation. To help explain our support and why we felt the legislation was important, we took one of our congressmen on a tour of a small local business expansion funded by credit unions after banks turned down the loan. After the tour, our congressman cosponsored the legislation.
New York: Front-Line Reports
LINTHICUM, N.Y.-Recognizing that credit unions are on the front lines of the economy, lawmakers in New York have asked credit unions and the Association how they can help them provide more services for their communities. We have provided them with many opportunities to promote real, workable legislative solutions at both the state and federal levels. Our lawmakers have also welcomed information about the local economy, recognizing that CUs have been working directly with families and small businesses struggling throughout the ongoing financial crisis.
N. Carolina: Compelling Examples
GREENSBORO, N.C.-Even as they have grappled with bailouts and many other policy issues related to the financial crisis, NC's elected leaders have been mindful of the key role credit unions have played in continuing to serve their members. As a result, lawmakers are aware as never before of the unique role CUs play in the financial system, as well as the lives of millions of Americans. Our congressional delegation has been interested in the credit union position on key legislative issues such as mortgage cramdowna, interchange fees and the proposed Consumer Financial Protection Agency.
In the case of interchange, the league provided a short video clip from a CEO who made the case for leaving the current interchange fee structure unchanged. This video was widely shown in Washington as a compelling example of how changing the interchange fee system would harm smaller financials.
More recently, elected leaders have been curious about how credit unions can be part of the solution in the area of credit to small businesses. As a result of these inquiries and the grassroots response by CUs, Sen. Kay Hagan voiced her strong support for raising the business lending cap. Hagan's support followed Rep. Walter Jones' co-sponsorship of the House version of the MBL bill (HR 3380). Through vigorous grassroots action, credit union people have weighed in these important matters over the past year. As Congress continues to examine financial system regulatory reform, we expect more feedback and questions in the year ahead.
Ohio: 'What Are You Doing To Help?'
COLUMBUS, Ohio-Ohio's Congressional delegation has praised credit unions for keeping true to their not-for-profit, cooperative values. The appreciation bestowed upon CUs is not only a reflection of our action during the recession, but the financial restraint and responsibility shown by financial co-ops while other institutions looked to take advantage of an opportunistic financial marketplace. The most common question from lawmakers was and continues to be, "What have you done for my constituents in my district who are facing financial difficulties." Our direct response has been to provide examples of how CUs have been willing to work with members, helping them through their struggles, rather than leaving them to fend for themselves. CUs throughout Ohio have made adjustments to mortgages, car loans, and provided necessary financial education, helping families make ends meet.
While the Ohio League appreciates the positive commentary and compliments during our dialogues with our delegation, we ask that in return lawmakers support legislation that will allow us to do more. Ohio has been devastated by the recession, and local and state elected officials have pointed toward the development and growth of small business as an answer. Our CUs can be a lifeline to many struggling small business and to local government. We are working to leverage our praise to gain support for MBL legislation in Congress and to pass legislation allowing CUs to accept public deposits in Ohio.
Oklahoma: 'Arbitrary' Caps
OKLAHOMA CITY-The questions we are getting from our legislators, state and federal, are simple: how are credit unions doing in this meltdown? Our answer is equally simple: it has been challenging but Oklahoma CUs are doing well. Our biggest obstacles have come from paying for problems we didn't create, whether that be from the issues with the corporates or the backlash from regulators and legislators on the big bank mistakes and irresponsible behavior.
We are here and have been here making loans of all kinds to our members. Despite our small percentage of the financial marketplace we are major players in financial literacy education. We are partners in our communities not because it is "good for business" but because it is what is right, what we do and what we've always done. We want to help our members more but we can't. We have small business owner members, the lifeblood of our great nation, who need help, small loans, and many times we have to say no. Why? Because of an arbitrary cap placed on CUs. Banks don't want and won't make these loans because the profit margin is too low. But we can and would if that arbitrary cap was lifted. What we need is for our representatives to look at the facts of our "threat" to banks and help us do what we do best-help the "Joe the Plumbers" of our country.
Oregon: Reps At Town Halls
BEAVERTON, Ore.-At every level, lawmakers are hearing from their constituents who want to explore their options of financial service providers and have asked Oregon CUs how they can support us in our efforts to help rebuild the economy. At the national level, lawmakers are supportive of credit unions extending capital to small businesses. We have been fortunate to host separate town halls with three members of Oregon's congressional delegation. The topics discussed in each town hall varied on the issues that were most important to that district. However, one topic that carried through all districts was the need for more capital for small businesses. We are proud that at the conclusion of each town hall, the three representatives (Wu, Schrader and Blumenauer) agreed to co-sponsor the Promoting Lending to America's Small Business Act (H.R. 3380).
At the state level, lawmakers are very interested in exploring more public entities using CUs to house their funds. In fact, the legislature is acting on a public funds bill as part of Oregon's special legislative session. At the local level, lawmakers want additional information about the services and products CUs can offer. We are taking advantage of every opportunity to educate, ask for support and provide an option for businesses, local governments, new members and lawmakers. We are hearing from lawmakers we've never heard from before.
Pennsylvania: 2 Programs Cited
HARRISBURG, Penn.-In Pennsylvania, there's been concern by our federal, state, and local legislators about the economic environment. However, the vast majority, if not all, recognize CUs are part of the solution, not the problem. Throughout December and January, Pennsylvania's CU leaders met with all the members of Pennsylvania's congressional delegation and/or their staff in their district offices. We spoke with each of them regarding the need for regulatory reform, including increasing the business loan cap, interchange fees, and other critical issues. We will follow up that effort with Hill visits during GAC to reinforce our positions.
Throughout our visits, CU leaders invariably received positive feedback from elected officials regarding Pennsylvania's iBelong campaign and the Credit Union Better Choice program. Our iBelong campaign is a statewide awareness effort employing television, radio, Internet, and other advertising to let Pennsylvania consumers know that there's a CU for them. The three-year campaign has been extremely successful as exhibited by increased membership growth, documented better awareness numbers, and positive image of credit unions. In addition, Pennsylvania's Better Choice program has served as a model REAL Solution to payday lending, with more than $13-million in loans originated and almost $10 million in savings to consumers.
S. Carolina: Confirming CU Role
IRMO, S.C.-South Carolina lawmakers' questions typically have been to confirm that CUs are difference-makers that have not contributed to the financial crisis. We have extended those conversations, noting CUs' intent to strengthen their ability to reassure and help consumers-and, in turn, the economy. Within the state, our most consistent objective of the year was more stringent regulation of payday, title, and other non-traditional lenders, and the result was a compromise measure the impact of which is still being determined. However, the number of such institutions has declined fairly drastically since, and there is another measure in process to further define affected lenders.
Our congressional delegation has been receptive of every issue we carried to them, and only the visible public issues were limiting factors in what our elected could reasonably do. Because South Carolina CU advocates were consistent with key points on MBL, mortgage "cramdown," and regulatory issues, it became clear at mid-year that our members of Congress-who also were attentive to positive press-appreciated CUs' value to constituents and the impact of our positions. Our delegation fully supported the system solution to the corporate situation, was quick to correct the CARD Act's unintended consequences, and is particularly interested in the potential for small business lending and its job creation.
Tennessee: National Focus, But...
CHATTANOOGA, Tenn.-In Tennessee, on the state level, as much as possible we are staying under the radar. We have a limited number or resources to influence legislators here, and there is crying need for us to support national issues. But there is an initiative in Tennessee that we do not have to place a great deal of resources toward, and that is to amend legislation to allow county funds to be deposited at any federally insured financial. There, we can play more of a defensive role. We do expect banks to oppose it. On the national front we have our hands full, and that is where we are dedicating our resources to help organize consistent responses to what CUs need.
Texas: No Going Back
FARMERS BRANCH, Texas-First, most lawmakers wanted to be sure credit unions were safe and operating normally as they surveyed the damage caused by the financial meltdown. Lawmakers are applauding our continued focus on members and appreciate that Texas CUs have not pulled back on member lending. They are also interested to hear of the surge in deposits many Texas CUs received in 2008/2009 as bank and market woes dominated headlines. We are also seeing a surge in member business loan interest, as many banks have pulled back lending, even with long-time relationships, and panicked small business have turned to their local credit union for help-they will not be going back to banks again having been "cut-off" right as economy turned south, they will stick with their CU. Consequently we are seeing more interest in MBL bills HR 3380 and S. 2919 than in the past, as lawmakers wrestle with reducing unemployment and getting the economy back on track-they are increasingly seeing credit unions as part of a comprehensive, positive, no cost to taxpayers solution. Just look at the Texas co-sponsors HR 3380, they run the spectrum from Republicans like Ted Poe, John Culberson and Ron Paul to Democrats like Solomon Ortiz and Eddie Bernice Johnson-truly bipartisan support.
Vermont: A Counselor in Every CU
SOUTH BURLINGTON, Vt.-Lawmakers in general have obviously been desirous of all kinds of consumer protection proposals brought about, at least in part, by the state of the economy and perceived unscrupulous financial services practices over the past few years. Like every other CU association, we're spending a great deal of time working individually with legislators to ensure they understand how their well-intended efforts can sometimes negatively impact credit unions unintentionally. Most have been understanding. The challenge is to help find a resolve to the perceived inequity without doing damage to the very institutions that consumers are turning to in droves as part of their financial services solution. In addition, lawmakers have been increasingly cognizant of the need for increased consumer financial literacy. To that end, we've embarked on a project to certify, at no cost, a financial counselor in every Vermont CU seeking to do so, and we've created a new and innovative state-wide high school financial literacy effort focused around music and social media.
Washington: 3 Common Responses
FEDERAL WAY, Wash.-In Washington we keep getting three general responses from policymakers: (1) How are credit unions faring in this economic climate? (2) I love my credit union - how can we protect credit unions and still "stick it" to the banks? (3) This should be your year - go for it! We continue to respond by telling them that the economy has been tough on all financial institutions, but that Washington credit unions generally have high capital and are prepared to weather the storm.
We tell them that they can best help us by: (1) not creating new and substantial burdens applicable to CUs, and (2) by ignoring our opponents arguments and unleashing the statutory and regulatory proscriptions that inhibit CUs' ability to serve their members!
West Virginia: A Keen Interest
PARKERSBURG, W.V.-It was clear to us that West Virginia's Congressional delegation was keenly interested in the how the economic recession was impacting constituents in their districts back home. Hearing real stories on how CUs and their members were coping in this economic climate seemed to resonate well with lawmakers. Many of the questions we fielded, centered around the degree of impact legislation would have in the areas of interchange fees, "mortgage cramdown," Credit Card Act, CFPA, and overdraft protection. Our response consisted of arranging regular face-to-face visits in Washington, and in the respective district offices to voice our concerns in a unified manner.
Wisconsin: Lawmakers Interested
MADISON, Wis.-In looking for ways to protect consumers from predatory practices and the greater effects of the economic downturn, lawmakers have been interested in learning how Wisconsin credit unions are helping their members through these tough times. State lawmakers have specifically looked closely at ways to reduce dependency on payday loans and limit foreclosures. Through lawmaker visits, hearings and taskforces, we have demonstrated Wisconsin CUs' REAL Solutions to provide payday alternatives and affordable mortgages that don't send members spiraling into debt. Wisconsin CUs have been applauded by state lawmakers for their efforts and viewed as a constant source of best practice. And overall, the Wisconsin league and our network of more than 1,000 activists continue to convey to lawmakers the value and benefits Wisconsin CUs bring to their communities.
Wisconsin credit unions have remained well capitalized as they continue to lend and provide vital services to members. To this point, CUs saw growth in assets, loans and membership - in fact, membership increased by more than double the rate of state population growth and nearly double the average rate of membership growth over the past decade - a clear indication that Wisconsin consumers rallied to credit unions for their financial needs. Simply put, we've demonstrated to lawmakers that we've held strong to our time-tested, core value of putting people before profits - it's not only benefited not-for-profit credit unions, but the 2.2 million Wisconsinites who own them.
