Much Adieu About Nothing?
Credit unions lost a close ally when Congressman Paul Kanjorski conceded the race to Hazelton Mayor Lou Barletta. The congressman earned his stripes with credit unions during the fight to push through H.R. 1151 in the 105th Congress, which many have proclaimed saved the industry, although some at the time questioned whether it did much good at all.
In fact, that legislation is how credit unions got nailed with prompt corrective action, which set the restrictive nonrisk-based requirements for credit union capital they are lobbying to overturn. CUNA CEO Bill Cheney has said that capital reform will be a top priority for the trade group in the 112th Congress. Additionally, H.R. 1151 hit credit unions with the cap on member business lending, which they are currently working to overturn or at least increase. Credit unions are expending considerable political capital on reversing these two items, not to mention time and money.
These were unfortunate compromises made along the way, but in the end the legislation to save the multiple common-bond charter was passed over a legal ruling won by the American Bankers Association. The legislative process isn't pretty, especially when the affected credit unions were desperate. Kanjo, has he has been nicknamed, was an integral part of the congressional team that made that legislation a reality. He is to be commended for that.
But since 1998, positive credit union legislation has been few and far between. Still Kanjorski was there pushing through the Credit Union, Bank and Thrift Regulatory Relief Act-a mouthful of an acronym compared to CURIA but without the same teeth CURIA had. The act, which contained the least controversial elements of CURIA-namely expanded business lending powers and capital reform-was "an important step forward in our legislative debates about how best to ensure that credit unions can better serve their members," according to Kanjo.
CURIA was introduced in the closing days of 2003 and over five years gathered many co-sponsors and was introduced in the Senate. But that bill that could have expanded lower-cost financial services to Americans ironically died with the financial crisis. After the Democratic takeover in 2008 (seems like a lifetime ago after Nov. 2, 2010), the strategy has been to break the legislation up into bits and pieces in hopes it would move through more easily.
Here too, Kanjorski stepped up to the plate, sponsoring the legislation to essentially double credit unions' member business lending authority. But here we are heading into a lame duck session of Congress after elections and the MBL legislation will not go anywhere. And again, credit unions have lost one of their closest-if not the closest-Democratic allies in Congress.
Credit unions have repeatedly thanked Kanjorski for his efforts. CULAC was Kanjorski's fourth highest PAC contributor before including the partisan communications made on his behalf; when his leadership PAC is factored in it drops to fifth, contributing $19,000, according to the Center for Responsive Politics. That achievement is a great showing for credit unions' political prowess. NAFCU PAC, which is much smaller, gave the $10,000 max contribution to Kanjorski. Credit unions should not forget what the outgoing congressman has done for them even though his home district seems to have forgotten all the funding and goodies he has brought home to them.
However, another cost could be the damage to relations with Congressman-Elect Barletta. The credit union lobbyists will have to jump on reparations right away to ensure at least a positive working relationship with him.
The 112th Congress will not be gloom and doom for credit unions because they have maintained a nonpartisan strategy, which works well for them. At press time, Republican Congressmen Spencer Bachus (Ala.), who originally voted against H.R. 1151 but is a credit union convert, and Ed Royce (Calif.), an original co-sponsor of CURIA with a strong working relationship with CUNA CEO Bill Cheney, were vying for the House Financial Services Committee chairmanship. Bachus or Royce. Either way credit unions win. Republican or Democrat. Either way credit unions win. Now maybe credit unions can actually trounce the banks and win some member business lending and capital reform legislation.