Over the last couple of years, a small coalition of creditunions has built up the background and the foot soldiers to helpmaneuver supplemental capital legislation throughCongress.

One can see where this could have been viewed by the tradeassociations as predatory to their business, but it's absolutelynot, according to The Coalition for Credit Union Access. The grouphas worked very hard, and wisely I would add, to build consensusamong the trades, credit unions and the regulators on what thelegislation to allow credit unions to count supplemental capitaltoward net worth should look like and what it would mean for creditunions.

Building consensus around supplemental capital has taken somedoing, as the trades (at one time) and individual credit unions haddifferent views on what form it should take. “It's tricky. We werepleased the planets aligned,” explained BECU Senior Vice PresidentParker Cann.

The coalition was only looking to supplement the trades'lobbying efforts as their attention was dispersed across NCUSIFpremiums, interchange and member business lending on top ofsupplemental capital. The group met with all the interested partiesand ensured all were satisfied with the precise wording of thelanguage before it was presented to King, who was insistent uponconsensus behind the bill.

According to fellow member Bethpage FCU SVP Linda Armyn, BECUdid a lot of the heavy lifting with the wording of the legislationand making sure a consensus could be built around it, whileBethpage worked their relationship with the bill's sponsor,Financial Services Committee member Peter King (R-N.Y.) to get thesolidly bipartisan legislation introduced, which happened about amonth ago. Simply getting the right legislation introduced took twoyears, but the coalition has been busy educating members ofCongress as well as many credit unions on the legislation and whatit actually does.

That groundwork is paying dividends. In addition to a heavyhitter like King, the bill enjoys bicoastal co-sponsorship fromRep. Brad Sherman (D-Calif.) and 16 other geographically diversemembers of Congress. The various representatives signed on fromvarious states demonstrates the support the coalition has, despiteits relative small number of official members. The group claims 40to 45 credit unions of all sizes and trade associations as members,as well as working loosely with many others.

Rep. Joe Baca (D-Calif.) signed on to officially support thelegislation March 20 during GAC. The presence of 4,000 credit unionleaders in Washington tends to have that effect, and more sign upscan be expected in the near term.

The number of co-sponsors is important to show broad enoughsupport to get a bill to the floor of the House and passed so itcan move on to the Senate. But the quality of the co-sponsors iscrucial, too, and this bill has the support of many FinancialServices Committee members, which is the committee of primaryjurisdiction.

As everyone knows from Schoolhouse Rock, the first step in thelegislative process is a committee hearing and vote, but thecoalition is looking to bypass all that. Having the bill introducednow means it could possibly be added as an amendment to anotherrelated bill that's already moving through Congress.

Election year politics however cannot be ignored. The bipartisansupport for the bill is a good sign. When the rubber hits the roadthough it may not be enough to survive the political quagmire.

The banking lobby is sure to take advantage of that situation.Banks far outspend the credit unions in campaign support, and thebanks will threaten to pull support from campaigns if credit unionsreceive authority for supplemental capital toward their net worth.It's a consideration for members of Congress looking to hold ontotheir jobs.

Recently during a Q&A I moderated for the Metropolitan AreaCredit Union Management Association, ABA Senior Economist KeithLeggett questioned the NCUA's ability to regulate to thelegislation. To that idea, Armyn responded, “That's ridiculous.”The coalition representatives pointed out that the NCUA has handledsupplemental capital with regard to the low-income credit unionsfor quite some time. Additionally, the agency could seek counselfrom the other banking regulators.

The key thing the bill will not do is, “It will not alter themember ownership. That's actually in the bill,” Cann emphasized.This is crucial to the potential success of the legislation. First,it's important intrinsically not to alter member ownership. And, incountering banker attacks to the legislation, maintaining themember ownership of credit unions is a basic tenet that the bankinglobbyists would pounce on.

This type of collaboration is an excellent grass-roots effortand exactly the type of cooperative work the credit union communityneeds and will hopefully spawn more.