What Will Happen to CUs if There's an Elephant Stampede?
What if the opposition party gains control of parts of government?
Congressional Republicans have spent the past three-and-a-half years trying their best to prevent what they see as bad things from happening. If some of the early handicappers are correct, however, the GOP may win majorities in one or both chambers of Congress and therefore will have to accept responsibility for helping run things. They might have to reconsider their (Groucho) Marxist approach: "Whatever it is, I'm against it."
That's a safe approach and will allow them to have allies in high places regardless of which party controls Congress. However, as the fight over raising the cap on member business lending has shown, even having the support of key senators, such as Senate Majority Leader Harry Reid (D-Nev.), doesn't guarantee success.
In fact, the Senate's unusual method of operating and the ability of a minority members to slow down the process prompted former Senate Majority Leader Bob Dole to describe his job as that of "majority pleader."
CUNA Vice President Ryan Donovan agreed with that but also noted that the impending 2012 presidential election may make it harder for Congress to achieve a great deal in 2011 and 2012.
"When you see the margins narrow or flip, there will be more room for moderates to maneuver," Donovan said. "But the presidential election will drive almost everything that happens."
If the GOP gains control of one chamber, it will likely put the brakes on some of Congress' regulatory zeal. Businesses and financial services providers, who regularly lambaste the current Congress and administration as being anti-business, see the prospect of a GOP takeover as the political equivalent of manna from heaven. However, as long as President Obama is in the White House, the existence of divided government is likely to result in policies that neither party is wildly enthusiastic about.
For credit unions, it means there would be less of chance for the expansion of the Community Reinvestment Act, which is a key priority for many of the Democrats on the House Financial Services Committee.
Regardless of which party controls Congress, there will be changes at the helm of at least one of the two key committees that oversee financial services.
Senate Banking Committee Chairman Christopher Dodd (D-Conn.) isn't seeking re-election. Sen. Tim Johnson (D-S.D.) is in line to chair the panel if the Democrats keep control. Although many large banks have operations in his home state, he's been supportive of some credit union priorities.