Trades Are Playing Defense in Hopes Of Preventing Legislative Damage
The lobbyists for credit unions are taking note.
On issues such as interchange fees, applying the Community Reinvestment Act to credit unions and allowing bankruptcy judges to reset mortgages, CUNA and NAFCU are trying to prevent bad things from happening.
"It's a very pro-consumer activist Congress, and we understand many members are going after the bad actors, and we have to take steps to be sure that it doesn't spill over federal credit unions," said NAFCU Senior Vice President Dan Berger.
His organization recently launched a grass roots campaign in which federal credit unions in eight congressional districts have run lobbying efforts focusing on members of the House Financial Services Committee to oppose a bill that would regulate interchange fees. It would require credit card issuers to negotiate with merchants and retailers for the fees paid on credit card transactions.
The lobbying is a response to television advertisements run by a coalition of merchant groups, which have tried to link credit card issuers to the subprime mortgage crisis.
"The subprime crisis started when the big banks discovered what they could make from subprime loans. They are continuing predatory loans with interchange fees," says the voice over, while an animated shot of credit cards collapsing like a row of dominoes is on the screen.
CUNA Senior Vice President John Magill said his organization has already worked on grassroots lobbying efforts in several districts, and they will redouble efforts when the issue comes back before Congress, either this year or next year.
The Electronic Payments Coalition, of which both CUNA and NAFCU are members, has approved ads and plans to air them shortly. The coalition holds weekly conference calls and meetings. A similar bill passed the House Judiciary Committee by a close margin last year but never made it to the House floor.
Magill noted that some of the proposals that would harm credit unions come from their friends on Capitol Hill, such as the CRA extension to credit unions.
"We don't want to be killed with kindness," he said. "So we have to convince members that it is redundant. We already have a great record on underserved areas, and we make the case for that with our record and our support for a bill that passed the House last year that would allow us to do more member business lending in underserved areas. We point out that we agree with the goals of the supporters of CRA but want to reach the outcome in another way."
The bill was introduced by Rep. Eddie Bernice Johnson (D-Texas) earlier this year though no additional hearings have been scheduled.
Berger and Magill said they discuss the issue regularly during visits with lawmakers and staff members-even though the issue isn't on the front burner-and bring in data and case studies to back up their argument.
"CRA is a regulatory burden and we remind them that the costs of those burdens have to come from somewhere," Berger said.
Negotiations are still ongoing in the Senate about a bill that passed the House allowing bankruptcy judges to reset the terms of mortgages. CUNA and NAFCU have fought to narrow the focus of the measure to only apply to subprime loans and other loans that credit unions for the most part didn't engage in.
CUNA and NAFCU are focusing their argument on the fact that credit unions are the good guys but are trying to counter the efforts of Democratic lawmakers-many of whom support credit unions-who argue that because of the scope of the housing crisis all loans should be subject to potential reset, even if those who made them did so in good faith without taking advantage of the lenders.