ARLINGTON, Va. — NAFCU President Fred R. Becker Jr. is theassociation's chief spokesman and lobbyist.

During his tenure with the association he has seen changes inhow Congress has functioned and has revamped the organization'soperations to make it more member-friendly. Before joining theassociation in 2000 he was the naval affairs director for theReserve Officers Association of the United States and prior to thatthat spent 25 years in the U.S. Navy, retiring as a captain.

Credit Union Times recently spoke with him in his office outsideof Washington about the climate on Capitol Hill for credit unionsand the overall political situation.

CU Times: How would you describe the power of credit unions onCapitol Hill these days? How does it compare to when youstarted?

Becker: I think credit unions are considerably stronger. Thesubprime crisis has resulted in us being in tumultuous times. Butif there's a silver lining in the subprime crisis, it's Congress'realization that in contrast from previous circumstances wherethere were questions about the value of credit unions and are theydoing the right thing for their members, the subprime crisis hasshown we are serving people in the right way, unlike some otherpeople in the financial services industry.

CU Times: Some lobbies are feared, like the NRA and AARP. What'sthe perception of the political clout of credit unions?

Becker: We are thought of as a powerful force. Credit unions, asyou know, wear the white hats. If you carry a gun it makes sense tobe feared. We don't carry guns and don't want to be in a positionto be feared, but we want to be in a position where they listen tous and recognize that we do carry clout with our members. Ourmembers are very concerned about their future and their financialfuture and what we're doing for them. They expect, as a result, afull panoply of services provided by credit unions, especiallysince in today's day and age they can get it elsewhere.

CU Times: How has the environment for credit unions changed inthe eight-and-a-half years you've had the job?

Becker: The subprime crisis has changed things prettysubstantially. We're doing a marvelous job this year of pushing forregulatory relief when if anyone else in the country were askingfor regulatory relief people would be scratching their heads andsaying, “No, we think you need more regulation given what happened,not less.” At the same time there are a number of consumer-relatedissues that would have an adverse effect on credit unions or thatwe might suffer collaborative damage from. We need to be watchfulof those and be sure that members understand the potentialramifications of them. We need to remind them that those who wearthe white hats didn't participate in this calamity or cause thiscalamity.

The bankruptcy legislation that was originally part of themortgage bill is an example. As you may be aware, the consumergroups approached me and asked me why we were being in their viewunreasonable in opposing the provision that allowed mortgages to bereset in bankruptcy. They thought that was unreasonable, but Isaid, “We didn't cause the crisis, we didn't participate in thecrisis and that provision would adversely affect our members. It'snot like the money is going to some stockholder's pocket, it'sgoing back to the members.” And so we went back and forth and had agood discussion. And under the worst scenario [and the measure diedin the Senate], we would have ended up having it apply only toloans over the 3% threshold; it wouldn't have applied to all loans.And so I think the environment has changed.

You have a Democratic Congress, and when I came you had aRepublican Congress. At the same time, the desire to provide creditunions more regulatory relief is quite prevalent.

CU Times: Talk about the upcoming presidential election. Whatwould a McCain presidency mean for credit unions? What about anObama presidency?

Becker: As you know, Senator McCain is a member of a creditunion (Navy Federal Credit Union), and as I understand it, SenatorObama is not. But on the issues, let's talk about the TreasuryBlueprint. When they have talked about it, they haven't talkedspecifically about credit unions, but there will be conversationsstarting from our side about the unique and important role ofcredit unions. I think both will be sympathetic to credit unions,especially since one's a member and the other I am sure has anunderstanding of what we do, though we haven't talked to himspecifically about it.

CU Times: You're a Navy guy. How well do you know SenatorMcCain?

Becker: I've met him. I've had lunch with Rick Davis, hiscampaign manager. I've worked with him when I was in the Navy. RickDavis was head of a housing group [the Homeownership Alliance, acoalition of real estate, financial services and advocacyorganizations working to further support for the American housingsystem].

CU Times: How would you describe your relationship with McCain?Cordial?

Becker: Cordial. Willing to listen. Very inquisitive.

CU Times: How about Senator Obama? Have you met him?

Becker: No.

CU Times: Have you talked with your members who have methim?

Becker: No. The lobbying staff works well with both sides ofaisle. As you know, we cover both parties. And I don't see anycause for concern with either one at the present juncture.

CU Times: You spoke about credit unions wearing the white hatsduring the subprime crisis. When you talk to members of Congressare there misconceptions about credit unions that you have todispel?

Becker: The rhetoric that you used to get about credit unions,especially the large credit unions not serving the right people,you're not getting that any more. People realize that credit unionshave to grow to the extent that the economy grows. If the economygrows faster than you do, then you fail to exist, so credit uniongrowth is a natural thing, not a bad thing. If you look at thehistory of some of the large credit unions, they started out verysmall. One of my board members Larry Wilson [President/CEO ofCoastal FCU in Raleigh, N.C.] has been there more than 30 years andhe was the first manager. Since then, there has been such growththat you now have a billion-dollar credit union. To serve yourmembers and offer them the panoply of services they expect today,to a certain extent, size helps. Duke University, for example, hasits own federal credit union and that one's relatively small, butthose professors at Duke expect the same services they can get at abank, the same financial services, et cetera. Over time, peoplehave come to understand that. At the same time, credit unions havedone it the right way, unlike the way some people have done it,which has caused the mess we're in.

CU Times: What about the other side. When you talk to creditunion executives, what's the biggest misconception you find abouthow things work?

Becker: Let's take for example CURRA [the Credit UnionRegulatory Relief Act] and how CURRA originally did not pass[though it passed the House in another form.] I think there wasn'tan understanding that all the grassroots in the world wasn't goingto help in that circumstance because the members [of Congress], asa result of our pushing for it and the bankers pushing against it,were caught in a Catch 22. They didn't want a recorded vote, wherethe recorded vote would be for one industry and against another inthe middle of an election year. It was pulled from the calendar inthe dark of the night because members went to the leadership andsaid “don't put us in this position in an election year.”

You could have a march on Washington that couldn't turn thataround. And understanding that sometimes the politics will prevail,that gets frustrating. I understand that. I came from the Navy, asyou know, and knew that credit unions are intent on doing the rightthing and Congress wants to do the right thing too, but some timesthings get in the way.

Last year, Congress fully intended to hold hearings on CURIA[the Credit Union Regulatory Improvements Act], but the worldchanged in August during recess, the subprime mess took off. As Isaid in a speech to the Housing Alliance, often Washington is onlygood at focusing on one thing. When they came back from the recess[House Financial Services Committee Chairman] Barney Frank held ahearing within two days on the causes of the subprime mess, andthey have stayed focused on it ever since. And you can't expectthem to go off of that focus because the country expects them to dosomething…

CU Times: What's next for credit unions, politically? Looks likeyou'll get a modified version of CURRA. You'll shoot for CURIA atsome point. What's next on your Christmas list for Santa Claus?

Becker: If we can get CURIA that would pretty much take care ofus for the interim. There are always other things that come up.

CU Times: What are the chances for CURIA?

Becker: I think that there's recognition on both sides of theaisle, within the administration, within the Congress thatrisk-based capital makes sense. It's a question of when we get toit. And that will depend on who's in charge next year and who comesin in the administration. Who the assistant secretary for financialinstitutions is and what's going on in the country that they haveto turn their attention to immediately. Today, it's investmentbanks and getting them under control. Who knows what it will benext year. My sense in talking to all sides is that it makessense.

Why shouldn't credit unions be judged on the basis of risks,just like banks? It's an improvement. But the banks remain againstit, you've got to wonder why. They make accusations that creditunions are unsafe but then banks don't want risk based. Thatdoesn't make sense, but it's not the first time that the ABA hasbeen a little duplicitous in their argument. They are duplicitouson the Blueprint as well.

CU Times: What about MBL caps?

Becker: I think in today's environment, given that banks havepulled back in giving loans, that's a problem. As you know, smallbusiness is what runs the country. They've sort of forgotten thaton the last day of the Clinton administration there was a Treasuryreport that said MBL was not a threat to the banks, and I don'tthink that that's changed at all. And my sense is that if theyreally want to help small business in this environment, now's agood time. That being said, of all the issues, banks remain themost opposed to that one.

CU Times: What's the biggest substantive change with theDemocrats controlling Congress?

Becker: The current Congress seems very focused on consumerissues. The consumers are being treated with respect to creditcards and overdraft fees, interchange, et cetera. And some groups,like the merchants on interchange fees, have their own agenda andare working very hard to convince the Congress that the consumer isnot being benefited by the interchange fee. While if the fee wereeliminated, the only person who would benefit would be themerchant, and I guess some consumers are important too. There's notalways a complete understanding of where the fee goes and how it'simplemented. Again, it's been our job to point out thedifferences….

CU Times: One more thing, what about the regulatory environment.What do you fear on the regulatory side from a Democraticadministration?

Becker: It's already starting. Congress doesn't have the votesto pass legislative changes, so they are putting pressure on theregulatory agencies, be they the Federal Reserve or NCUA to takecare of these matters. And I call that jawboning and that can anddoes have an influence. Look at the regulations already out therethat the Fed has proposed [on issues such as credit cards.] It's aquestion of how much political will for more things to be donethere will be. There needs to be a wait-and-see to see the impactof those regulations implemented before the end of the year to seefrom both sides whether they are working or whether more needs tobe done.

CU Times: What's the future for the clout of credit unions?

Becker: It will continue to grow over time. You have to keepyour presence known, even in the best of times because it answerstheir [Congress'] questions and keeps you in their minds. Also, thetown turns over regularly, so there is a constant battle on ourpart to inform the new folks about what we do.

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