What’s the outlook for CUs?
Going into the election, most pundits expected the 112th Congress to be a gridlocked Congress no matter who is in charge. Certainly, a divided government presents its challenges in terms of enacting legislation, whether that's a repeal of previously enacted bills (i.e., health care or financial reform) or enactment of new legislation (i.e., capital reform for credit unions).
Congressional leaders might have a list of things that they would “like” to do. But political realities often prompt them instead to answer the question, “What can we do?” or “What must we do?”
Out of the gate, expect Congress to consider tax reform and ways to tackle the federal budget deficit. It is also possible that Republicans, now in control of the House, may force symbolic votes to repeal the Health Care Reform law or parts of the financial reform bill.
However, with President Obama wielding a veto pen, we do not expect those measures to be enacted.
Housing finance reform will be the top agenda item for the House Financial Services Committee and the Senate Banking Committee. This would have been true no matter which party controls the chambers.
The key question here will be, what role should the federal government have in the secondary mortgage market? It is a question that will sharply divide Congress, but it is also one that will be incredibly important to credit unions which rely on the secondary mortgage market.
With Republicans in control of the House, it’s safe to expect a number of oversight hearings on the implementation of the Dodd-Frank Act, as well as the administration's handling of the financial crisis.
However, an ambitious legislative agenda is not expected because very shortly the 2012 campaign season will begin and both parties will be posturing for position in the presidential election.
While it’s obvious that Rep. John Boehner (R-Ohio) will be Speaker and Rep. Eric Cantor will most likely become Majority Leader, other leadership positions and committee chairmanships will be determined in the coming weeks.
However, at this time, this is what we expect:
In the Senate, we expect that Senator Reid will remain Majority Leader and that other leadership positions will remain unchanged.
The key change in the Senate relevant to credit unions will be the chairman of the Senate Banking Committee. Sen. Timothy Johnson (D-S.D.) is expected to claim the chairmanship of that committee.
All of this is subject to change as the party caucuses meet over the next several weeks.
We will, of course, follow these meetings closely and communicate updates as developments warrant.
BILL CHENEY is CUNA’s president/CEO.
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