Credit Unions Could Use a Couple of Notches on Their Gun Barrels
There's a first time for everything. Just last week, a credit union representative was called on to testify at a hearing regarding a bill for community banks-sort of. It wasn't terribly controversial, but it was a start.
The House Financial Services Committee held a hearing to review initiatives to promote small business lending and job growth. CUNA President/CEO Dan Mica testified regarding legislation to enact the Small Business Loan Fund, a fund for which credit unions do not qualify. The appearance was a testament to the sway a former member of Congress, particularly one soon leaving his current position, carries.
The bill is intended to spur community banks into lending again to small businesses. "Credit unions are not eligible to participate in the SBLF; and, quite frankly, credit unions do no seek to be eligible for this fund," Mica stated in his written testimony. To the contrary, credit unions want to create jobs and lend without taxing the American public. It's shrewd positioning and a statement no elected official heading home this fall to unemployed constituents can argue against.
Mica noted the legislation that has been introduced in the House and the Senate to increase credit unions' member business lending cap. He also highlighted a Treasury proposal soon to be delivered to lawmakers. Soon was the only timeline provided.
Committee Chairman Barney Frank stated that his committee would hold a hearing on the matter. No time frame was offered.
Credit unions and their representatives must quit accepting empty promises-really, what weight does a hearing carry or a proposal coming soon-and lean harder on policymakers to take action instead of their own sweet time. Credit unions have been working on expanded business lending authorities for more than half a decade. How much more patient can credit unions be?
Callahan & Associates Industry Analyst Elliott Kashner recently wrote a guest blog entry for Credit Union Times' Credit Union Exchange regarding the messaging in this particular battle between the credit unions and the banks, noting an ad by the California league as a good example on the credit union side. He also highlighted: "There also is a powerful narrative that is the antithesis of the credit union story. This narrative is not powerful because of the quality of the arguments, but because of the organization, efficiency and efficacy of the storytellers. The American Bankers Association has launched a campaign against lifting the MBL cap. The ABA provides an e-mail template for bank executives containing recommended text for executives' to e-mail to their representatives.... The less you participate in the telling of your story, the more others dictate your story to you."
Mica's testimony at the hearing was a bit feistier than the credit union lobby typically tends to be. As he stated, "The only group that opposes [lifting the cap] is the group that's about to get $30 billion," referring to the SBLF. He might have added, "of taxpayer funds."
This is precisely the direction credit union legislative efforts should take. Of course at times you know you're fighting a losing battle, but I don't think business lending is. If credit unions don't get this done during the financial services crisis, typically the only time Congress acts on anything, they never will. In fact, a national advocacy campaign targeting the voters-credit union members and nonmembers alike-is in order. As a pilot program, target a handful of lawmakers that 1) are borderline but unlikely to return to Congress after the November elections and 2) have opposed credit union efforts, and take that message to the people. This person doesn't want capital going to your local businesses. Or, even to be more politic, support the challenger in a race with an anti-credit union incumbent. The trade groups PACs very rarely do this.
What could be the harm? These lawmakers aren't likely to return to Washington next Congress. And if they do, they aren't going to support credit unions anyway. Credit unions have shown some clout in helping their friends get re-elected in tough fights such as Paul Kanjorski and Joe Lieberman. Now is the time to see if elections can be influenced in the opposite direction.
Credit unions have maintained the proverbial white hat in their political activities, but if done strategically, credit unions' political clout could grow exponentially by keeping someone from getting elected.
To earn a healthy respect, you not only need to know how to work with people-even difficult ones-99.9% of the time, but it doesn't hurt for a little fear to be lingering in the back of their minds either. Certainly not bullying, but just that type of respect an employee might have for their boss. The two can work very well together, but the employee always knows the boss can control the future of that employee. The lawmakers are our employees, not the other way around.
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