WASHINGTON — Banking groups have launched a renewed assault against a bill that would raise the cap on business lending at credit unions as Senate leaders weigh whether to vote on the measure before yearend.
Both advocates and critics of the legislation agree it's not clear if or when a Senate vote will happen during the lame-duck session, but both sides see it as a distinct possibility.
"We've always thought that if there was an opportunity to bring that up, it would be during the lame-duck session when there's more floor time available as members debate larger issues," said James Ballentine, executive vice president of congressional relations and political affairs at the American Bankers Association.
Senate Majority Leader Harry Reid promised in March to hold a vote on the bill, which would double a cap on credit union business lending to 27.5% of assets, but indefinitely delayed consideration of it a few weeks later.
The Nevada Democrat was trying to spare colleagues a tough vote on legislation that pitted credit unions, which argue the bill will help boost small business lending, against banks, which see it as an unwarranted expansion of credit union powers.
With the election over, industry representatives said the Senate may act in the lame-duck session as Reid attempts to make good on his promise.
Credit union advocates said they are optimistic about the prospects for a Senate vote. The Credit Union National Association is sending credit union leaders and small-business owners to Capitol Hill this week as part of a grassroots lobbying effort for the legislation. A rally with lawmakers, including the bill's chief sponsor, Sen. Mark Udall, D-Colo., is planned for Tuesday evening.
"We feel good about the position we're currently in. We'll feel even better about it this Thursday after hundreds of grassroots visitors descend on Capitol Hill tomorrow," said John Magill, executive vice president of government affairs at CUNA. "We are confident about an eventual bill making it through the legislative process and the House."
Brad Thaler, vice president of legislative affairs at the National Association of Federal Credit Unions, said the banking industry's assault is a sign the bill is gaining traction.
"The bankers realize that credit unions are getting close to getting this issue passed, so they've stepped up their attacks," Thaler said.
The ABA, along with the Independent Community Bankers of America and a number of state associations affiliated with both groups, are mobilizing against the measure.
The groups penned a letter to Reid and Senate Minority Leader Mitch McConnell, R-Ky., on Monday expressing their concern over the "counterproductive and highly controversial" bill.
The groups warn against the possibility of combining the bill with a temporary extension of a program to extend a federal guarantee on non-interest-bearing checking accounts, a measure up for a possible vote during the lame-duck session — and one bankers are pushing for.
"With growing opposition within the credit union industry and concerns raised by the [Government Accountability Office], Senator Udall is now suggesting to combine this controversial legislation with unrelated banking legislation to move it through the Senate," the letter says. "Any attempts to merge this permanent power grab legislation with a temporary extension of the current Transaction Account Guarantee program or any other banking legislation will be strongly opposed by the banking industry."
The ABA is also sponsoring a fly-in of state association executives and bankers from across the country on Tuesday to help sway lawmakers against supporting the bill.
"The purpose of the letter is twofold. First it's to share with members of Congress that all of the community banks in their states and across the country oppose this bill," said Ballentine. "Second is to make sure senators are not in any way, shape or form listening to credit unions saying this is a simple measure that is broadly supported and very much needed. All of those things are false."
The ICBA, meanwhile, released a study Tuesday that it claims debunks some of the credit union industry's arguments in favor of the bill. The study concludes, for example, that raising the cap would result in nearly $16 billion in lost tax revenue because loans from tax-exempt credit unions would replace those made by commercial banks.
"This new study conclusively shows that supporting controversial legislation to expand tax-exempt credit unions' business-lending authority will do little to improve access to credit while posing serious risks to our financial system and federal revenues," Camden Fine, the ICBA's president and chief executive, said in a press release.