WASHINGTON – With optimism waning, hundreds of credit union executives and directors trudged to Capitol Hill again this week, pushing to finally move the bill to raise the limit on member business loans that has been before Congress for a decade or more.
“If it doesn’t happen this year it’s not going to happen,” John Farmakides, president of Lafayette FCU, said during NAFCU’s annual Congressional Caucus.
The chief of the $350-million, suburban Maryland credit union was among a growing number of credit unions that are bumping up against the 12.25% (of assets) cap on MBLs and badly in need of relief. Farmakides said his credit union is so close to the limit it is forced to constantly sell off MBL participations, including a $6 million share it recently sold to nearby Andrews FCU, in order to stay under the limit.
The 400 attendees of the annual NAFCU conference were met by hundreds more credit union representatives visiting Capitol Hill on behalf of CUNA and its state leagues, which held Hike the Hill visits from 13 states this week.
“I think what’s finally going to get this passed is we get more members of the business community come forward, people who benefit [to tell Congress],” said Greg McClellan, president of Max FCU, whose Alabama credit union is at about 80% of the cap. The irony is that Max participates in MBL pools with local credit unions and community banks – the same people who have succeeded in blocking the increase in the credit union cap.
“I sense we’re getting very close; more and more congress people are signing on, we’re getting more co-sponsors,” said Phil Browarski, chairman of the Glass City CU board, who has lobbied Congress ever since the MBL measure was introduced more than a decade ago.
“Right now all you hear is ‘jobs, jobs, jobs,’” said John Neusaenger, president of Orlando (Fla.) FCU. “And the best part of it is, it won’t cost a thing. It’s a tax-free jobs bill.”
But the credit union representatives all cite the banking lobby as the implacable opponent.
Lafayette’s Farmakides said he met with Congressional leaders such as House Minority Leader Steny Hoyer, D-Md., Sen. Barbara Mikulski, D-Md., and several other in his state’s delegation, who told him there are “pressures” blocking the bill, which he understood to mean the banking lobby. “The problem we’re facing is the banking lobby and the community banks are putting too much money into the system,” he told Credit Union Journal yesterday.
Max FCU’s McClellan said the banking lobby has been very successful in framing the issue as a trade-off, that credit unions need to give something up in exchange for an increase in their MBL limits – even though it was the bankers who convinced Congress to set a limit for the first time, as part of HR 1151, the 1998 CU Membership Access Act. He pointed to Louisiana Sen. David Vitter, who told attendees at the NAFCU conference they need to be prepared to sacrifice something for an easing of the MBL limits. “There is some very strong banking industry influence on Capitol Hill,” said McClellan.
“We’ve got to keep telling our story,” said Coastal FCU’s President Larry Wilson, whose $2-billion credit union is at 82% of the cap. He suggested the political climate is right to overcome the powerful banking lobby because of the bad publicity the banks have attracted. “The bankers have their feet in the mud right now,” said Wilson.
