Week ahead: New year, same government shutdown

With the government shutdown extending into 2019, credit unions are set to start the new year with the dual challenges of supporting furloughed members who work for the government while also bracing themselves for a new regulatory environment with the start of a new Congress.

Bloomberg News

Now in its second week, the partial government shutdown began on Dec. 21 and subsequently halted the operations at the departments of Justice, Homeland Security, Interior, Treasury, Housing and Urban Development, State, and Transportation.

In response, credit unions are offering a variety of programs to lessen the financial burden that furloughed members will encounter. Zero percent APR loans have become a particularly popular option.

And the shutdown could put a halt on credit unions’ advocacy efforts as a new Congress convenes. The 116^th Congress will get to work on Jan. 3, but with finding a way to fund the government a top priority, credit unions are likely to find their other legal and regulatory concerns placed on the back burner – at least temporarily.

Compounding the issue is the fact that the 2020 presidential campaign may have already kicked off, with Sen. Elizabeth Warren announcing today her plans to form an exploratory committee for a White House bid. A host of other candidates are sure to follow, meaning CUs may have to fight even harder to ensure the industry’s priorities are heard.

Meanwhile, once the ball drops in Times Square and the confetti is swept up, CUs will have plenty on their plate. For one thing, the start of 2019 will see marijuana legal in nearly half of all states, leaving credit unions to face the quandary of whether to serve the legal weed industry now while it’s still illegal at the federal level or wait and risk losing their competitive edge.

On top of that, the new year brings plenty of questions regarding how CUs will fuel further growth. One factor that could complicate matters is rising interest rates, which are putting pressure on credit unions that have had plenty of liquidity for nearly a decade. As a result of that, some credit unions are looking to run special rate certificates, but the industry as a whole will still have plenty of work to do if it hopes to maintain the success it has seen in recent years.