WASHINGTON — They are steeped in the intricacies of international finance and in debates on the merits of injecting billions of dollars into multinational banks. But when it comes to credit unions, the views of President-elect Barack Obama's economic team are less well known.
Treasury Secretary-designate Timothy Geithner's considerable areas of responsibility in policymaking and regulation have not included extensive work on credit union issues. As president of the New York Federal Reserve Bank for the last five years, he has been intimately involved in the government's recent efforts to bailout ailing banks.
When Lawrence Summers was the deputy Treasury secretary during the first part of President Clinton's second term (he was later promoted to the top job), his department strongly supported H.R. 1151, which gave credit unions broad authority to expand their membership. The under and assistant secretaries of Treasury testified on its behalf on Capitol Hill. Officials of the credit union trade associations hope that in the case of Summers the past is prelude, and as chairman of National Economic Council, he will come up with policy proposals that will help credit unions.
"It's hard to have a crystal ball, but our philosophy is close to that of the new team," said CUNA Senior Vice President/Deputy General Counsel Mary Mitchell Dunn.
NAFCU Chief Economist Tun Wai said Summers "knows credit unions and that they didn't cause the financial mess."
Geithner has never worked on Wall Street (his sole stint in the private sector was two years spent at Kissinger Associates, the international consulting firm run by the former secretary of state), and therefore could support policies that are favorable to credit unions.
Dunn noted that having fresh sets of eyes at the Treasury Department will help credit unions.
"I never got the sense that the current Treasury Department had a sense about what we did, so it led them to the wrong conclusions," she said.
Wai said NAFCU will work hard to persuade Geithner, Summers and congressional leaders that during the forthcoming efforts to restructure financial services regulation, NCUA should remain an independent regulator.
"If we convey to them how we serve our members, hopefully they won't put us in the same pot as the other financial services," Wai said.
During a March 27 speech at Cooper Union in New York City, Obama outlined his broad view of economic regulations, though did not mention credit unions. He said any change in regulatory structures should recognize how that marketplace has evolved.
"Reshuffling bureaucracies should not be an end in itself. But the large, complex institutions that dominate the financial landscape don't fit into categories created decades ago," he said. "A streamlined system will provide better oversight."
One of the new economic team's first tasks is to develop an economic stimulus package that Obama hopes Congress will consider in early January.
CUNA Executive Vice President/General Counsel Eric Richard said the early indications are that the package will focus on job creation items such as improving the nation's infrastructure. He said his association will look for opportunities to put credit union priorities out front, such as expanding member business loans and creating a risk-based capital system into legislation that may come up in the next Congress.
–cmarx@cutimes.com

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