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WASHINGTON-The credit union lobby knows it is taking a big political gamble by waging a new campaign to defeat the just-completed bank reform bill on the basis of an amendment that would set price controls on debit card interchange but the hope is it will have few lasting effects in a town where today's political enemies are often tomorrow's allies.

"There are no recriminations going forward," said outgoing CUNA President Dan Mica, of the potential that the newly established credit union opposition to the landmark bill will harm credit unions' relationships with the Democrat leaders in the House and Senate who pushed the bank bill to conclusions two weeks ago.

The formal credit union lobby-CUNA and NAFCU-pulled their support for the bill and called on all credit union executives to contact their members of Congress to urge a "no" vote on final passage after leaders agreed last week to include the interchange amendment.

"Our board voted to oppose the bill," said Mica, who is retiring from CUNA next week. "We negotiated as hard as we could; we got as much as we could, but it wasn't changed enough."

But Mica, who spent four terms in Congress before going to CUNA 14 years ago, said he expects little fall-out from the newly established credit union opposition-even as the bill is widely expected to be voted into passage this week. "That's politics," he said. "In Washington there's always another day, there's always another battle."

"I've always said in Washington, it's the issue. Your best friend today is your enemy tomorrow," said Fred Becker, president of NAFCU, which, like CUNA, found itself partnering with the American Bankers Association and the Independent Community Bankers Association in the unsuccessful effort to defeat the interchange amendment.

Both leaders expressed confidence their opposition to the bill favored by key congressional leaders will have no lasting impact on the credit union lobby.

Among the leaders favoring the bill was Illinois Sen. Richard Durbin, the second most-powerful Democratic senator who authored the interchange amendment and who expressed his distaste for the approach by CUNA in an angry letter to Mica early in the fight. But Mica said he believes Durbin, a long-time credit union support, will continue to be an ally. "I will tell you this, Dick Durbin considers himself and has been for 25 to 30 years, a friend of the credit union system," said Mica.


Holding A Grudge Would Be 'Silly'

NAFCU's Becker cited the practicality of Washington lobbying. "It would be silly to hold a grudge," he said. "There may be some time when he needs out help...That's the way Washington works."

Mica noted that despite their disagreement on this bill, credit unions are going to have to work with Congress going forward on legislation that interests them. For one, they are still hoping to get the long-sought increase in the member business loan limits passed. In fact, there were signs last week that may finally come to fruition.

Meantime, congressional staffers were working over the weekend on several "tweaks" to the interchange amendment aimed at minimizing its potential impact on credit unions and community banks.

Among those are provisions that would broaden the Federal Reserve's ability to consider costs associated with issuing debit cards when determining a reasonable interchange fee; certain anti-discrimination language that would bar retailers from favoring cards issued by big banks that come under the Fed's price controls directly; and the requirement for the Fed to conduct a study of the interchange amendment's impact on credit unions and community banks. Read more about what else is in the bill in the related story at right.

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