What Now? Reg Relief Expected, Inclusivity Hoped for, Tax Battle Possible
November 9, 2016 4:22 PM
Following the results of the 2016 elections, the credit union community which historically has found allies on both sides of the aisle looked back on the divisive campaign and ahead to what the next four years might hold.
Miriam De Dios, CEO of Coopera, a consulting and marketing firm that seeks to increase Hispanic membership at credit unions, commented that a new president is not unlike a new board chair or CEO.
Its an opportunity to bring yet another person into the inclusivity movement, which has been gaining steam for decades, she said. Its a grassroots movement, so those at the top arent necessarily the ones driving it. Yes, they can support and nurture it with policy, but they cant put an end to it.
De Dios added that credit unions are uniquely positioned to continue enhancing the financial lives of multicultural consumers. Im confident [this movement] will grow even if public policy doesnt immediately reflect it, she added.
Keith Leggett, a retired banking lobbyist who writes a blog about credit union issues, believes Donald Trump's victory could be a "mixed bag" for credit unions. While reducing regulatory burdens and rolling back Dodd-Frank would benefit credit unions, Leggett cautioned that the credit union tax exemption could be at risk, as Trump seeks to find revenues to pay for his corporate tax cuts.
"I suspect most, if not all, tax expenditures will be on the table," Leggett said.
Patrick Conway, president and CEO of the Pennsylvania Credit Union Association (PCUA), also said he is hopeful that the Trump administration will make moves to ease regulatory burdens on financial institutions. And he is especially pleased by a development closer to home the re-election of Pennsylvania Republican Senator Pat Toomey, who fought a very expensive and bitter campaign to retain his seat in the Keystone State.
We have worked closely with Pat Toomey and he has become a real ally for credit unions, Conway said. He is a champion for us.
Noting that Toomey is a member of various banking and finance subcommittees, Conway added that the senator has held hearings that investigated the cost of regulations upon credit unions, particularly those in rural areas.
CUNA CEO Jim Nussle issued a pair of letters following Election Day. In the first, directed at New Jersey Governor Chris Christie, who is leading Trumps transition team, Nussle encouraged the president-elects administration to focus on filling the vacancies on the NCUA Board and installing board members who not only understand how credit unions operate, but also support the credit union difference and the important role credit unions play in the lives of their members.
But Nussle also directed a letter to CUNA members in which he described Trumps election as enormously important for America and for America's credit unions. A main theme in working with the new administration, he wrote, will be an attack on reducing regulatory burdens.
He also expressed some optimism for the future, despite the contentious nature of the presidential campaign.
There is no question that this has been a difficult, divisive presidential campaign regardless of which candidate you backed, Nussle added. But now, as Americans, we must come together and focus on what we can and must do to unite this nation. America's credit unions reflect a broad cross-section of the American people, and I can think of no better group of people to immediately begin that healing process.
NAFCU CEO Dan Berger sent a letter of his own, imploring Trump to enact meaningful regulatory relief and asking Trump for his support for the credit union industry. Berger cited the value that credit unions tax exemption provides to all Americans, since credit unions serve as a check on rates from other financial institutions.
"Credit unions are under a regulatory assault in the wake of the Dodd-Frank Act, Berger wrote. Lawmakers and regulators readily agree that credit unions did not participate in the reckless activities that led to the financial crisis, and as such, shouldnt be caught in the crosshairs of regulations aimed at those entities that did. Unfortunately, that has not been the case thus far and finding ways to cut-down on burdensome and unnecessary regulatory compliance costs is a chief priority of NAFCU members."
Berger also lamented that regulatory burdens on credit unions has led to the declining number of credit unions, citing how many smaller institutions cannot cope with the tide of new regulations and often have to merge out of business or be taken over.
