CU Trades Hope to Turn Electoral Successes Into Payback Policy Wins
WASHINGTON -- They helped save the career of one of their top allies, were instrumental in defeating an incumbent freshman and overall supported far more winners than losers.
Now the credit union trade associations are hoping that when the new Congress convenes next year, they will get some things in return.
In pulling out all the stops for embattled U.S. Rep. Paul Kanjorski (D-Pa.), both CUNA and NAFCU saw to it that they won't have to find a new top champion for their cause on Capitol Hill. Kanjorski, the No. 2 member on the House Financial Services Committee, and the panel's chairman, Barney Frank (D-Mass.), are both strong supporters of the work of credit unions.
CUNA Senior Vice President for Legislative Affairs John Magill said Frank had told them that he would strongly oppose any attempt to remove credit unions' independent regulator. Kanjorski is one of the main sponsors of the Credit Union Regulatory Improvements Act, which would provide an array of regulatory relief measures in areas such as risk-based capital and raising the cap on member business loans.
Given the Democrats' stronger majorities in both chambers of Congress, Magill said they are more likely to work with Frank and Kanjorski to frame those issues in terms of being catalysts for economic growth in light of the strong opposition of many in Congress toward deregulation.
To save Kanjorski, CUNA worked with the Pennsylvania Credit Union Association on partisan communications, mailings that reached 18,000 households of members of five credit unions on behalf of Kanjorski, and about 50 people affiliated with credit unions volunteered on behalf of Kanjorski, who defeated Hazleton Mayor Lou Barletta with a final tally of 51.7% to 47.3%.
"We played a small but rather significant role," said Pennsylvania Credit Union Association President/CEO James McCormack.
Members of credit unions that are part of NAFCU also volunteered for Kanjorski as did NAFCU Associate Director of Legislative Affairs Amanda Slater, a former member of his staff.
The political action committees of CUNA and NAFCU each gave Kanjorski $10,000, the maximum allowed by law.
Other credit union friends who won closely watched races included Sens. Susan Collins (R-Maine) and Mary Landrieu (D-La.), Sen. Minority Leader Mitch McConnell (R-Ky.) and Senator-elect Mark Udall (D-Colo.).
Credit union backers and Senate Banking Committee members John Sununu (R-N.H.) and Elizabeth Dole (R-N.C.) both lost.
In the House, several credit union supporters were defeated, including Reps. Joe Knollenberg (R-Mich.), Marilyn Musgrave (R-Colo.), Jon Porter (R-Nev.) and Tim Walberg (R-Mich.). CUNA worked with the Michigan Credit Union League on a partisan communication on behalf of Knollenberg.
CUNA's political action committee--the Credit Union Legislative Action Council--won one and lost the other of the two seats in which they spent considerable money on independent expenditures.
In Kansas' 2nd District, Treasurer Leslie Jenkins, a long-time credit union supporter, defeated freshman U.S. Rep. Nancy Boyda (D) 50.8% to 46%. CUNA's PAC spent $114,720 to produce and air advertisements on behalf of Jenkins.
In Missouri's 9th District, the PAC spent $184,021 on advertisements and brochures on behalf of state Rep. Judith W. Baker, a Democrat who has been supportive of credit unions during her tenure as a state legislator. She lost 50% to 47.5% to former state House Financial Services Committee Chairman Blaine Luetkemeyer.
Because early polls showed the race to be too much of a long shot, CULAC declined to mount an independent expenditure on behalf of state Rep. Erik Paulsen to an open seat in the 3rd District in the suburbs of St. Paul. He was running against political newcomer Ashwin Madia, who had proposed taxing credit unions as a way to raise money for other economic initiatives.
CULAC did, however, contribute $5,000 to Paulsen, a Republican, who won 48.5% to 40.9%. The Minnesota Credit Union Network, which endorsed Paulsen early, deployed volunteers into his district who helped get the message out to voters.
CULAC's most recent report filed with the Federal Election Commission indicated that it contributed $1.9 million to candidates and spent $434,405 in independent expenditures in the 2007-2008 election cycle. It's PAC was the 14th largest contributor according to the Center for Responsive Politics, a research organization.
Of the 32 Senate races in which CULAC gave money to candidates, its candidate won in 25, lost in three, and four races were not decided at press time. Its PAC participated in 359 House races, and its candidates won in 332, lost in 20, and seven races were undecided at press time.
NAFCU/PAC's most recent report filed with the FEC indicated that it had spent $385,151 throughout the election cycle.
Of the 10 Senate races in which it gave money to candidates, its candidates won in eight and lost in two. It participated in 109 House races and its candidates won in 104 and lost in five.
Lobbyists for CUNA and NAFCU said these political activities--coupled with credit unions' record of helping their members and having a positive impact on the economy--could help persuade lawmakers and officials of the Obama administration to support items on the trade groups' wish lists.
"We have made it a point to engage in building bipartisan relationships, but with Democrats looking for ways to improve the economic climate, we've got a great story to tell and can find ways to get some of what we want and avoid having negative policies passed that would negatively impact our members," said NAFCU Senior Vice President of Government Affairs B. Dan Berger.
He predicted that credit unions would be forced to play defense to avoid having the NCUA combined with other regulators and to prevent Congress from requiring credit unions to comply with the Community Reinvestment Act.
CUNA's Magill expressed similar concerns and said he feared that some allies of credit unions in both the House and Senate will "love us to death" on those issues and other ones such as bankruptcy reform and credit card regulation.
Some congressional Democrats and Obama advisers have expressed support for changing the bankruptcy law to give judges the right to reset the terms of mortgages during bankruptcy proceedings, which credit unions have long opposed.
Some lawmakers also want to place stricter regulations on credit card issuers' marketing and billing practices.
Venable Partner William J. Donovan, a Washington lobbyist for credit unions and other financial service providers, noted that Senate Banking Committee Chairman Christopher Dodd (D- Conn.) and Frank have expressed support for many of these ideas and they could well be part of legislation that Congress considers next year.