In the last year, credit unions have shown the power of direct political action and engagement on the issues that matter.
Credit unions made their voices heard with the industry's categorical rejection of the NCUA's first risk-based capital (RBC) proposal. NCUA received more than 2,000 comment letters on this proposal from credit unions and their trades, including NAFCU. And because of your overwhelming and decisive repudiation of this proposed rule, the second proposal — though not perfect or needed — has yielded us some improvements.
The RBC example underscores the importance of credit unions' feedback to regulators, lawmakers and NAFCU on all issues that directly impact you. Credit unions, while unique within the financial services marketplace, are all too often swept into rules that really shouldn't apply to us. As the saying goes, "the squeaky wheel gets the oil." That is certainly true in politics, and we stand a much better chance of easing regulatory burdens if we are willing to talk to and share our stories with our lawmakers and regulators.
To that end, in February I had the opportunity to testify before the Senate Banking Committee on credit unions' growing regulatory burden. In my testimony, I discussed the major disconnect between the views of regulators and the regulated and used NCUA's risk-based capital proposal as a case in point. My testimony also included NAFCU's Top 10 ideas for regulators to take that would immediately give credit unions regulatory relief without upsetting the safety and soundness of the industry.
In our current business climate, the next new regulatory burden is usually just around the corner. Here's one: In October, CFPB's Truth in Lending Act and Real Estate Settlement Procedures Act integrated mortgage disclosures rule takes effect. In addition, CFPB has been clear that rules are in the pipeline concerning overdraft and payday lending. Added to that is NCUA's likely consideration of new regulatory measures to address interest rate risk more stringently.
Frankly, if we wait until regulations are in place, it is already too late. We must make political advocacy an integral part of our business activity if we wish to help stop bad regulation from taking root. That is why NAFCU has taken the lead on the Hill to get legislation to stop and study the RBC issue before NCUA finalizes any rule.
Every year, NAFCU gives us a great opportunity to engage with the people whose work in Congress has an impact on our operations and members. NAFCU's Congressional Caucus, Sept. 14-17, gives us a personal and direct connection with our lawmakers to share our stories. When lawmakers hear the challenges faced by financial institutions in their own communities, serving their own constituents, they are more likely to help us achieve some relief.
Though Caucus is an annual event, your political engagement should not be limited to that event. An involved membership will serve as NAFCU's strongest asset as it engages directly with lawmakers and regulators — and, in turn, it will be our main path to getting some regulatory relief. Helping to protect our 100 million members' interests is the centerpiece of our business model and a solid foundation upon which to build our advocacy efforts.
We need to recognize that, in order to be successful, political advocacy is a process, not a destination. To create a positive relationship with your regulator and lawmakers requires developing that relationship over time, in Washington and in home districts.
For those of you who are joining us in Washington, thank you for your support and commitment. The time you spend with your members of Congress and their staff will go a long way to help advance the value of credit unions.
For those of you unable to attend NAFCU's Congressional Caucus this year, your involvement is equally important. You can capitalize on every opportunity to connect with our lawmakers and regulator. You may connect with them at a town hall meeting. Engage online by following them on Twitter or liking them on Facebook to communicate on the issues that matter to credit unions and thank them for their endeavors to address those issues. Better yet, host an event at your credit union and invite them to see firsthand the impact your credit union has in your community.
We have seen the power of our political advocacy regarding the NCUA's risk-based capital proposals. With so many other issues looming on the horizon, now is the time to tackle the challenges ahead of us and to make our voices heard to help credit unions and their 100 million members prosper in the future.
Ed Templeton is president and CEO of SRP Federal Credit Union and chair of NAFCU.
