With the Trump presidency just a month old, CU Journal reached out to credit union presidents to get their take on the new president – the good and the bad, and what the movement could gain or lose from his policies.
Note: Some responses were compiled within the first three weeks of Trump’s term and may not all reflect the most recent headlines. Responses have been edited for length and clarity.
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Issa E. Stephan, president and CEO of First Financial Federal Credit Union, Freehold, N.J.
I think it is too early to judge. Several news stations and news social media are still in pre-election “campaign” mode. Their behavior is blocking the American people from a clear view into the new presidency. Credit unions stand to gain from a three-member board [at the Consumer Financial Protection Bureau]. Also they will benefit from more balanced regulations. Credit unions stand to lose their unique identity. The new presidency might lump the banks and credit unions in one bucket.”
Cathie Mahon, president and CEO of the National Federation of Community Development Credit Unions
The Trump administration is concerning to community development credit unions and the communities we serve. Executive Orders on Immigration have created panic, chaos and ongoing sense of unease which is not good for lending. Anti-immigrant rhetoric and actions means that those CUs serving immigrant communities will have a harder time reaching new members [and] making loans – particularly high-impact loans like vehicles, homeownership and business.
While we haven’t seen the administration’s budget plans, reports that the Trump administration is preparing “dramatic” budget cuts that would “reduce federal spending by $10.5 trillion over 10 years” are cause for concern. A trillion in cuts per year is a lot of money given that the annual federal budget is only about $3.8 trillion total. Budget cuts are expected to fall hardest on working families with children while tax cuts will benefit the wealthiest 1%. Credit union members are the former not the latter.
The anti-consumer agenda of Congressional Republicans and the current administration is hailed as a good thing in the financial services industry. But as CDCUs we know that reducing consumer protections and increased predatory lending disproportionately affects lower-income consumers and communities of color, thereby undermining their financial condition and weakening their credit-worthiness.
Mike Vadala, president and CEO of The Summit FCU, Rochester, N.Y.
The [Trump] presidency has been in existence for [a short time], so it’s pretty hard to pass judgement on that. I am not big on ruffling international feathers or the categorization of certain religions, nationalities and so forth. I’m still not sure if this is a strategy to get people to listen to tough talk, or just plain mean and insensitive. But I am willing to wait and see what [Trump] is trying to do. Personally, I think that there is a good chance that career politicians in both parties could be a little shaken by his victory and may not want him to succeed, because it puts them at risk. That might limit his support in Congress. [For credit unions] it seems that there will be less regulation and more help will likely be in place for businesses. We could gain from these policies. The worst case from a business standpoint [for credit unions] would be the elimination of our tax status. Dropping taxes on large corporations might find its way to us. Someone may have to pay something to cover what is lost there. Large international problems could find their way to us if that happens, which is not different from any presidency.
Dan Berger, president and CEO of the National Association of Federally-Insured Credit Unions
We welcome regulators taking a hard look at the Dodd-Frank Act for ways to lift current burdens, but we will also continue to press the CFPB to use the authority it has now to exempt credit unions from regulations that were created to address abuses in which credit unions did not engage. Ultimately, we look forward to the administration, Congress and the regulators working together to reduce regulatory burden.
Dave Bleazard, president of First Service CU
It has only been a few weeks, but I think the president has seen some successes and some failures. It’s a mixed bag. He needs to stop with the buffoonery on Twitter, because he keeps shooting himself in the foot. He started out with a bang, but we can see things already getting mired in politics and bureaucrats working against him. He needs to focus on digging in and working to drain the swamp in Washington, like he promised. It could be a big win if he can get something done about eliminating regulations and reducing the size of government…
I think credit unions stand to gain a sizable reduction in regulatory burdens. The president’s stated intention is to reform or eliminate the CFPB, which is a historically uncommon agency, whose single director has almost unlimited power…I hope the President and Congress do what they have pledged, to repeal or significantly modify the Dodd-Frank Act and the CFPB. In the end, I hope the CFPB can be reined in by the appointment of a bipartisan board and by subjecting them to the usual appropriations committee for funding.
The only way credit unions can lose is if the presidency becomes mired in scandal and Congress is unwilling to cooperate with the president, so we end up with a stalemate. I agree with the sentiment that Washington is broken, and that the love of power and money in that city has institutionalized corruption…The bottom line is that what credit unions need to compete and win is for government to get out of our way and let credit unions do what we do best – serve our members.
Jim Nussle, president and CEO of the Credit Union National Association
We appreciate the administration’s direction to ensure that regulations are appropriately tailored to target those harming consumers and to provide more consideration to the impact of these regulations on American consumers. The current one-size-fits-all style of regulation does not work for Main Street – local credit unions, small banks, and the consumers and small businesses they serve. We’re hopeful that the core principles spelled out [by Trump’s administration] will help ensure community financial institutions and the millions of Americans that rely on them are able to operate in a more favorable environment. We stand willing to work with the administration and Congress to make appropriate changes to achieve these goals.
Rob Werner, president and CEO of Ardent CU
President Trump is looking to dismantle or weaken some of the regulations that came out of the 2008 Financial Crisis, primarily Dodd-Frank…Last year [CUNA estimated] the cost of regulation just in our industry was estimated at $6.1 billion plus $1.1 billion in lost revenue [since 2010]. Any reduction in the regulatory burden on credit unions will be able to be passed directly back to our members in better rates on loans and deposits and our continue philosophy of low to no fees.
The financial crisis also brought about the Consumer Financial Protection Bureau (CFPB), a new regulatory body that protects consumers in the areas of credit cards, mortgages, and other financial products. Since the credit union industry’s driving focus and mantra is “people helping people,” we believe we protect our members as a matter of practice, without having to be legislated…All the rule changes that came about from the crisis were designed to rein in abuses that credit unions never engaged in. Credit unions and their members are paying the price for misdeeds by large banks and unregulated financial providers….
Do we need regulation? Absolutely. We are the people that are protecting our members’ financial assets. Is there room for reduced regulation? Absolutely. If the Trump administration is able to have a second look at the burden placed on the financial institutions and in particular, the credit union industry, it will have a positive impact for our members.
Paul Gentile, president and CEO of the Cooperative Credit Union Association
I am pleased the administration has elevated Mark McWatters to acting NCUA chairman. I believe his record on transparency, cost control and exam fairness will produce positive results for credit unions.
Jim Minge, president and CEO of Texas Trust CU
I think there have been some really good cabinet choices…people with a strong business background and focus, and that’s a good thing. It has taken longer than usual to get those people confirmed, so we haven’t yet seen what the agenda will look like. I do think that the administration is seeing that when you move from business to government, it is harder to get things done, and it’s taking longer to get their agenda in place. I do have to say that using Twitter as a communications tool is risky. It’s hard to communicate a message in 140 characters and there isn’t much room for nuanced thought.
The biggest thing we have to gain is regulatory relief. That was clearly part of the president’s campaign, and we have already seen some initiatives to simplify regulations across the board, including for financial institutions. The directive to eliminate two existing regulations for every new one was music to my ears, but I’m not sure how easy that will be to do. I would hope for some reforms to Dodd-Frank and Durbin, which could be very good for credit unions.
One thing I worry about is that anytime Congress starts to open up the tax code, the question about credit union tax exemptions comes up. It’s an opportunity for our banker friends to push for that tax. So as an industry, that is something we have to remain vigilant about and make sure we are telling our story about how we help Americans and support our communities.
Mark Cummins, president and CEO of the Minnesota Credit Union Network
Credit unions truly stand to gain relief if we act now to take advantage of this historic opportunity to rein in regulatory burden. To be successful, we will need to engage our credit union members to become advocates for us and build on the populist tone of this presidency.
Jeff Olson, president and CEO of the CU Association of the Dakotas
Regardless of what one thinks of President Trump, I believe the next two years [leading up to midterm elections] will provide an incredible opportunity for credit unions to pick up major legislative wins. More specifically, we are certainly in a great position to achieve some measurable results in regulatory reform. The executive order[s]…[are] a clear sign that President Trump and his administration are intent on rolling back some of the regulations that we have been subject to since the Dodd-Frank Act passed in 2010.
With tax reform on the top of mind of many lawmakers, including the president, we could lose the one thing that makes us different: the federal tax-exemption status. As we continue to ask Congress and our regulator for capital reform, member business lending relief and field of membership expansions, we may be asked to give something up down the road. Sometimes you have to be careful what you wish for. I have seen far too many pieces of good public legislation … amended to the point where the original intention of the bill is lost or becomes complicated and harmful.
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