Adjusting to the Realities of a New Year: Editor/Publisher's Column
Forget that jobless claims were revised upward, even higher than initial projections. The New Year is a time for optimism. As California CU League Economist Dwight Johnston wrote in his commentary in the Trust for Credit Unions e-newsletter, “This was the fifth year in a row of triple-digit gains on the first trading day of the year.”
But while the stock market rallies, the economy does not necessarily follow. In addition to the unemployment numbers, the consumer confidence index is depressed and home-refinance applications, accounting for 82% of total mortgage activity, have declined for three consecutive weeks, according to the Mortgage Bankers Association.
Economic realities were happening in the business lending market all around, taking down a number of larger credit unions, like Texans and Telesis. The bankers were able to make hay out of it and even more of a stink than credit unions. Miffed by the bankers’ opposition to expanded business lending, CUNA was able to help stop the community bankers from getting the Transaction Account Guarantee extension in an effort to demonstrate its reciprocal might.
We saw NAFCU turn the corner toward the tax exemption last fall with the study it commissioned and release during its Congressional Caucus that found that eliminating the credit union tax exemption would cost the federal government $15 billion in lost tax revenue, $148 billion in GDP and 1.5 million lost jobs over the next decade. A more unified front would have helped the chances for business lending, but it still appeared a long shot due to the bankers’ opposition and lack of consensus among credit unions.