What if the opposition party gains control of parts ofgovernment?

Congressional Republicans have spent the past three-and-a-halfyears trying their best to prevent what they see as bad things fromhappening. If some of the early handicappers are correct, however,the GOP may win majorities in one or both chambers of Congress andtherefore will have to accept responsibility for helping runthings. They might have to reconsider their (Groucho) Marxistapproach: “Whatever it is, I'm against it.”

CUNA and NAFCU have both been ramping up contributions toRepublicans as a way to hedge their bets, though they are stillgiving more to Democrats.

That's a safe approach and will allow them to have allies inhigh places regardless of which party controls Congress. However,as the fight over raising the cap on member business lending hasshown, even having the support of key senators, such as SenateMajority Leader Harry Reid (D-Nev.), doesn't guarantee success.

In fact, the Senate's unusual method of operating and theability of a minority members to slow down the process promptedformer Senate Majority Leader Bob Dole to describe his job as thatof “majority pleader.”

NAFCU Executive Vice President Dan Berger contends that if theDemocrats had a smaller majority-let alone became the minority-itwould be easier to negotiate better deals for credit unions.

“I'd like to see at least one of chambers with narrowernumbers,” Berger said during a discussion of current legislativeand political climate at NAFCU's Annual Conference. “The Democratsdefinitely take a more activist, pro-consumer approach.”

CUNA Vice President Ryan Donovan agreed with that but also notedthat the impending 2012 presidential election may make it harderfor Congress to achieve a great deal in 2011 and 2012.

“When you see the margins narrow or flip, there will be moreroom for moderates to maneuver,” Donovan said. “But thepresidential election will drive almost everything thathappens.”

The Senate has 57 Democrats, two independents who caucus withDemocrats and 41 Republicans. There are 37 Senate seats that willbe decided in November.

The House has 256 Democrats, 178 Republicans and one vacancy.All 435 House seats are up this November as they are in everyeven-numbered year.

Washington's conventional wisdom-sometimes more conventionalthan wise- is that there is a better chance of the GOP taking overthe House than the Senate. However, if the public's discontent withPresident Obama and the Democratic Party remains strong, all betscould be off.

If the GOP gains control of one chamber, it will likely put thebrakes on some of Congress' regulatory zeal. Businesses andfinancial services providers, who regularly lambaste the currentCongress and administration as being anti-business, see theprospect of a GOP takeover as the political equivalent of mannafrom heaven. However, as long as President Obama is in the WhiteHouse, the existence of divided government is likely to result inpolicies that neither party is wildly enthusiastic about.

For credit unions, it means there would be less of chance forthe expansion of the Community Reinvestment Act, which is a keypriority for many of the Democrats on the House Financial ServicesCommittee.

However, other issues are likely to be high on the agenda ofboth the House and Senate, regardless of which party gains control.These include reform of government-sponsored enterprises Fannie Maeand Freddie Mac and reform of capital rules.

Credit unions have a keen interest in GSE reform because Fannieand Freddie often buy their mortgages. The capital reform issue isimportant because many credit unions believe that being able toraise member capital-which could be counted toward net worthrequirements-is key to their financial well being.

Regardless of which party controls Congress, there will bechanges at the helm of at least one of the two key committees thatoversee financial services.

Senate Banking Committee Chairman Christopher Dodd (D-Conn.)isn't seeking re-election. Sen. Tim Johnson (D-S.D.) is in line tochair the panel if the Democrats keep control. Although many largebanks have operations in his home state, he's been supportive ofsome credit union priorities.

The panel's top Republican, Richard Shelby of Alabama, has notalways been a huge fan of credit union, but he isn't an implacablefoe either.

House Financial Services Committee Chairman Barney Frank(D-Mass.) is expected to keep the post if his party is in themajority.

The GOP leadership on the panel is less clear. Rep. SpencerBachus (R-Ala.), the panel's top Republican is likely to face achallenge for the chairmanship. Those who could make a race for itinclude: Rep. David Drier (R-Calif.), Rep. Jeb Hensarling (R-Texas)and Rep. Edward Royce (D-Calif.)

Royce has been a strong supporter of credit unions and sponsoredlegislation that the movement has pushed for, such as a hike onmember business lending. The others have been generally supportiveof the financial services industry but haven't bent over backwardsto help credit unions.

Combine new leaders, controversial issues and an imminentpresidential election and the result is the continuation of avolatile political environment.

Fasten your seat belts. We're in for a bumpy ride.

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