Midterm elections this month are expected to dramatically reshape the Congress in ways that will most certainly have an impact on the credit union legislative agenda in the coming year. The Credit Union National Association’s (CUNA) legislative team already is formulating strategies for advancing credit union issues in this new environment.
Heading into the midterms, most political prognosticators were predicting the Republicans to regain control of the U.S. House of Representatives. The GOP needed 39 seats to win back the majority, but some were forecasting higher gains of 50-plus. A Republican majority in the Senate was considered less likely unless Democrats stumble badly in races they’re expected to win.
Whether the Republicans succeed or the Democrats hold the Senate, and even somehow keep control of the House, the reality is that the Congress that convenes in January will have much slimmer majorities, whichever party is in power. And the heavy partisanship that has defined Congress in recent years is expected to become even more bitter.
Under these heated conditions, there will be much more rhetoric and posturing than substance. Not much actual legislation is expected to pass beyond must-do measures like appropriations bills.
Recognizing a more challenging environment lies ahead, CUNA will continue lobbying hard for one of its top legislative priorities—member business lending (MBL)—in the lame duck session of this Congress, scheduled to resume on Nov. 15.
With its job-creating potential and absence of government cost, the MBL bill is gaining support, and in a lame duck session will be better able to avoid the election-year machinations that prevented its inclusion in the Small Business Lending Act enacted this past fall.
Should the MBL effort not pan out in the lame-duck session, we believe passage in the next Congress, though more challenging, is still viable.
“Jobs are the No. 1 issue on the minds of the electorate,” notes CUNA Chief Lobbyist John Magill. “Republicans and Democrats may not agree on much, but we think they’ll be drawn to a measure that can create more than 100,000 jobs in the first year at no taxpayer cost. The public policy case for MBLs continues to be extremely compelling.”
Capital reform will be another top CUNA priority in the next Congress, as Credit Union Magazine readers know from September’s cover story, “Could alternative capital unleash CUs’ true potential?” As the solutions being considered suggest—mandatory membership shares, optional membership capital, subordinated debt—capital reform is more arcane than small-business lending. But that may actually work in our favor in the next Congress.
“It’s un-sexy enough to move,” says Magill. “A lot of work can be done behind the scenes and we can make real strides. We must be sure to emphasize that these instruments will not change credit unions’ charter, structure, or mission. That’s the misconception that the bankers will try to foment.”
The timing is also right in that the broad, recently proposed capital reforms for banks, known as Basel III, have policy makers thinking about capital, and so more amenable to consideration of alternative capital for credit unions.
Finally, a more divided Congress is less likely to pursue or enact overdraft protection reform, expansion of the Community Reinvestment Act, mortgage cramdowns in bankruptcy, and further encroachments on interchange—all of which credit unions have previously opposed. And CUNA will be on guard against any attempt to target credit unions’ tax status as lawmakers look to rein in federal deficits.
“There has been a lot of ‘incoming’ in the past few years,” Magill said. “I think this will greatly diminish in the next congressional session. Our big challenge will be advancing our offensive goals in a deeply divided Congress. We can do it, but we’re going to need all the political involvement and grassroots support from our members that we can muster.”
MARK WOLFF is senior vice president of communications for the Credit Union National Association. Contact him at 202-508-6764 or at email@example.com.