WASHINGTON — Credit unions flexed their muscles at the ballot box last year and their next challenge is to reap rewards for their efforts in Congress.
The political action committees of CUNA and NAFCU both raised and spent more than they ever had before. More importantly, both backed the winning candidate more than 90% of the time.
Both were especially active in helping save the seat on behalf of Rep. Paul Kanjorski (D-Pa.), a leading credit union supporter in Congress who was considered one of the most endangered incumbents.
CUNA's PAC, the Credit Union Legislative Action Council, had its best year ever. It raised almost $4 million and made contributions of around $3 million. It is the 14th largest PAC in terms of donations, according to the Center for Responsive Politics.
NAFCU-PAC, which began the 2007-2008 election cycle with $112,537, raised $370,635 and spent $411,335.
The money and shoe leather will gain credit unions access to lawmakers to make their case but there's no guarantee of the outcome.
"It gives us a presence and helps ensure awareness of our issues and that, combined with our strength at the grassroots are factors that elected officials pay attention to," said John Magill, CUNA's senior vice president of legislative affairs. "It's never a quid pro quo, but it provides an opportunity to make our case."
The trades had some legislative success his year. In June, CUNA and NAFCU were successful in persuading the House to pass the Credit Union Bank and Thrift Regulatory Relief Act (H.R. 6318), which grandfathers existing approvals of underserved areas and allows federal credit unions to apply to serve underserved areas outside their field of membership. Loans in those communities and to non-profit, religious institutions would not count against their member business loan cap. It would also permit credit unions to provide short-term unsecured loans to anyone in their FOM.
The bill was then sent to the Senate where it died.
Lobbyists for both CUNA and NAFCU said they would be "nimble" to find a vehicle to attain those goals in 2009.
Credit unions hope for similar opportunities in the executive branch. Lawrence Summers, Obama's top economic adviser, ran the Treasury Department during the Clinton administration and, at the time, credit unions were pleased with many of the policies on regulatory matters.
NAFCU Chief Economist Tun Wai said Summers "knows credit unions and that they didn't cause the financial mess."
Although Obama spoke a lot about the economy during the campaign, he did not speak about credit unions and his statements about restructuring financial regulation were rather general.
"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 in March. "A streamlined system will provide better oversight and be less costly for regulated institutions."
Neither Obama nor his aides have addressed the issue of whether they favor keeping NCUA as a stand-alone regulator.
House Financial Services Chairman Barney Frank (D-Mass.) has said he favors maintaining a separate regulator for credit unions.
CUNA and NAFCU lobbyists said they would try to get priorities such as capital reform and eliminating the cap on member business loans included in stimulus legislation that Obama has said he wants to sign soon after he is sworn in.
While credit unions will be seeking benefits from the new Congress, they will also be playing defense to prevent what they see as bad things from happening.
Both Frank and Obama have talked about expanding the reach of the Community Reinvestment Act and making it applicable to credit unions, but they may tackle that only after addressing the immediate economic crisis with the stimulus bill. CUNA and NAFCU also will fight to prevent lawmakers from passing legislation to order merchants and card issuers to negotiate interchange fees. The House Judiciary Committee narrowly passed such a bill this year but it was never considered by the full House.
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