Sad but true. Credit unions, which pride themselves on their grassroots capabilities, failed to turn out the impressive numbers the bankers did in the battle to get the Credit Union Regulatory Relief Act (H.R. 5519) through the House on the suspension calendar.
Of course, the bankers were aided by the fact that the Independent Community Bankers of America had 300 members in Washington, D.C., for its Governmental Affairs Conference. Add a couple hundred other bankers participating in organized fly-ins. And that calls into question whether this was their plan all along. This was the strongest display of the banks' grassroots yet with undoubtedly more to come.
I've seen Hill correspondence that said even phone calls to congressional offices were heavily in the bankers' favor. What gives?
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Credit unions are usually able to turn on a full court press that even several members of Congress and other pundits have deemed impressive. Granted, turn around was pretty quick in the zigzagging of events that surrounded CURRA's failed attempt to even get to the House floor. The bill was supposed to have been paired with a bank regulatory relief bill to keep everyone on their best behavior. Still credit unions should have had phone lines ringing and e-mail boxes jammed with their communications in support of CURRA before this got started.
The timeline as I understand it was that House Financial Services Committee Chairman Barney Frank (D-Mass.), one of the aforementioned admirers of credit union grassroots, pulled the banker bill after they broke the pact by sending out an action alert to oppose CURRA. This toppled his carefully crafted agreement between the feuding groups not to attack each others' bills; the bankers decided all bets were off and waged a full-blown frontal assault.
CUNA and NAFCU tried to gin up the credit union grassroots in response but to no avail. Still the credit union lobbyists from both groups knew they had the votes for the two-thirds majority they needed to pass the bill on the suspension calendar, typically reserved for non-controversial items like declaring National Split Pea Soup Week.
While the credit unions won that round, the bankers delivered a knock out in round two when House Majority Leader Steny Hoyer (D-Md.), who has spoken at CUNA's Governmental Affairs Conference and is generally thought of as a credit union friend, pulled CURRA from consideration on Monday, April 28, the eve of the vote. While Hoyer must respond to his Democratic colleagues' wishes if they wanted to avoid a recorded vote and was not intending to punish credit unions, the action certainly did.
Items on the suspension calendar can pass on a voice vote alone. All the bankers had to do was get one member of Congress to show up to object, forcing a recorded vote. The political consideration here is that members of Congress would have been forced to choose sides–literally on the record–between the sworn enemies in an election year, which many certainly did not want to do.
But credit union grassroots need to be strong enough, and prepared in advance, to overcome these situations because their campaign contributions certainly aren't going to do it and otherwise they're stalemated.
So what happened to the credit union grassroots lobbying force that pushed H.R. 1151 through in a single legislative session?
One school of thought is that CURRA doesn't contain enough for credit unions to get excited about. It truly is a stripped down version of the Credit Union Regulatory Improvements Act (H.R. 1537). It does not contain the risk-based capital provision or the broader business lending enhancements that both trade associations have said were tops on the list for their members. CURRA is simply political maneuvering without much substance.
However, what the non-wonk might not understand is that political maneuvering is as important, if not more important, than substance at this stage of the game. We're only talking about a simple House vote right now. There's the entire Senate side of the process to consider: take up the House bill or introduce separate legislation? If the Senate uses the House bill will it be amended in committee? On the Senate floor? If it comes out different than the House bill who will serve on the conference committee and how will it be amended there? Will the president sign it?
CURRA is simply a vehicle to get credit unions, and CURIA, in the game so they can play. While it might not have much now, it could make gains, and admittedly losses, in the long and convoluted legislative process. The American Bankers Association even called it a test case for CURIA in its Action Alert that ultimately killed the proceedings.
The other part of the bigger picture was this disappointing display of credit unions' grassroots prowess, which will resonate beyond just CURRA if all credit unions do not resolve now to become more politically active. Credit unions lost this procedural battle but not the war.
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