MBL Hike Lower on CUNA Priorities
CUNA announced new legislative priorities for 2013 that include four key agenda items: preserving the credit union tax exemption, reducing regulatory burden, engaging in housing finance reform and advancing credit union charter enhancements.
That marks a significant change from 2012, when raising the member business lending cap to 27.5% of assets was the primary goal.
Why the change? Executive Vice President of Governmental Affairs John Magill said last year’s atmosphere on Capitol Hill presented an opportunity to get a vote on member business lending, as lawmakers were pressured to help small businesses. However, because the 113th Congress is expected to tackle tax reform, CUNA has shifted its focus accordingly.
Additionally, Magill said while not all credit unions need a higher member business lending cap, all are struggling with heavy regulatory burdens. That feedback from members, combined with the expectation that new House Financial Services Committee Chairman Jeb Hensarling (R-Texas) is expected to give regulatory relief considerable attention this year, prompted the reshuffle.
“I think you will see lots of hearings,” Magill said about regulatory relief. “There aren’t enough votes to repeal Dodd-Frank, but I think you will see some substantive picking at the edges of regulatory reform. Not a huge bill that overturns anything but bits and pieces of legislation moving through Congress.”
However, member business lending will still have a seat at the CUNA table. Magill said CUNA expects MBL bills to be reintroduced in the House and Senate within the next few weeks by Rep. Ed. Royce (R-Calif.) and Sen. Mark Udall (D-Colo.).
The decreased emphasis on MBL is news to Bill Crane, senior vice president of mortgage operations and general counsel for the $825 million CFCU Community Credit Union. Crane attended CUNA’s Nov. 27 Hike the Hill event in support of member business lending. He said MBL will continue to be the Ithaca, N.Y.-based credit union’s top legislative priority in 2013.
Currently at 82% of its MBL cap as of year-end, Crane said the restriction “really handcuffs our business in terms of being able to lend to our business members.”
Despite a lack of progress on MBL in 2012, Crane said he’s not fatigued or discouraged, and said the credit union’s executive team and board recently agreed to continue pushing for an increase in the MBL cap. In fact, when CFCU Community travels to Washington in February for CUNA’s Governmental Affairs Conference, Crane said its three representatives will push MBL during appointments with elected officials.
However, Crane added that he wasn’t aware credit union tax exemption was an issue and said should a threat arise in 2013, it would become a top priority for his credit union.
Another shift in strategy at CUNA will be a more aggressive approach toward bank lobbyists. Magill said CUNA’s opposition to something bankers wanted last year–an extension of the transaction account guarantee–contributed to the bill’s failure. He cited American Bankers Association CEO Frank Keating, who wrote in a daily news bulletin that in addition to politics, credit union lobbying against TAG done “out of spite since banks have helped to stymie the credit union business lending bill…were insurmountable.” Magill also pointed to a mid-December report in Washington publication The Hill that called CUNA and NAFCU opposition to the extension of TAG a “victory over community banks.”
If banks continue to oppose credit union issues, they can expect that successful TAG pushback to be repeated, he said.
“It’s not in the credit union DNA to oppose things,” Magill said. “We’re cooperatives, and we cooperate by nature. But, we’re tired of sitting around and taking it from banks, tired of taking just the crumbs that are handed to us. We expect parity and we’re going to fight for it.”
Magill added that CUNA received kudos from some members of Congress for standing against TAG after bankers opposed MBL.
“We couldn’t walk around the Hill without people saying, ‘Way to stick it to the banks’,” he said.
Independent Community Bankers of America’s Paul Merski, executive vice president for congressional relations, said that’s not what he’s heard. Merski called CUNA’s claims it helped defeat TAG “preposterous” and said the bill was instead tripped up by a procedural hurdle.
And, Merski said, the change in TAG position actually hurt credit unions in the Capitol.
“A lot of members’ offices were saying, ‘What are you guys doing, just opposing [TAG] for spite?” he said.
Members of congress were also irritated that credit unions continued to pitch MBL as an attachment to other bills, he said.
Merski disputed Magill’s statement that Congress is asking for a credit union-bank package deal that benefits both industries, so elected officials aren’t forced to choose sides.
“They want legislation that they can support that stands on its own,” Merski said. “It just gets more complicated and difficult to pass these types of combination deals in an attempt to appease everyone.”
However, he did say bankers and credit unions could find common ground this year working together to relieve regulatory burden.
CUNA will also look to build upon a record-breaking fundraising year for CULAC, which exceeded $2 million in net receipts in 2012 and attracted $3.9 million during the 2012 election cycle.