So how do credit unions break through the gridlock and advance their agenda to better serve their members? Here are four strategies:
1. Stay focused on priorities. Credit unions’ top legislative priority is preservation of the current tax status. The latest threat is different than the one we faced in 2005 when the House Ways and Means Committee took a look at it.
That episode was almost completely driven by the banking lobby. While bankers will continue their paid media and lobbying barrage, the chief challenge to the tax status will come in the context of a broader debate on deficit reduction. Congress is looking for revenue and spending cuts in every corner.
During the next 18 months, Congress will examine numerous tax preferences and exemptions. This will almost certainly include the credit union tax status.
In the grand scheme of things, taxing credit unions would be like using the coins found under the sofa cushions to help pay the mortgage. It would produce a relatively small amount of revenue while at the same time eliminating an important consumer access point for financial services.
Regarding proposals to tax credit unions, one Congressional staffer said, “that juice ain’t worth the squeezin’.”
Turning this perception into reality means we’ll need to wage a public advocacy campaign in support of the tax status at a time when many other tax preferences are also under threat.
That’s why CUNA has been working with the state leagues to develop and execute a comprehensive and deliberate grassroots, communication, and legislative strategy.
2. Apply the lessons of our recent legislative victories and failures.
Despite the widespread gridlock, we achieved success in the 112th Congress when we pursued small regulatory relief measures. One example is the ATM fee disclosure bill that was enacted in December.
This legislation removed a requirement that credit unions post a placard on their ATM machines notifying users that they might be charged fees if they used the machine.
We were able to get this done for two reasons:
We worked with a coalition of interested parties, including banking trade groups and retailer organizations, to make a clear and coordinated case.
Before we even went to Congress, we met with consumer groups and plaintiffattorneys groups to address their concerns. These steps helped us get the bill through the House and the Senate without a single “no” vote.
This year, we have a robust legislative agenda to reduce credit unions’ regulatory burden by addressing specific regulatory requirements and encouraging
reforms to the CFPB. Our efforts on the ATM legislation represent the recipe for success that we hope to follow on these initiatives.
Just as there are lessons to learn from our victories, it’s also crucial to learn from our setbacks. The outcome of the member business lending bill in the 112th Congress offers lessons about neutralizing opposition and defusing controversy. It’s also helped us see the extent to which the process in Washington impedes common-sense public policy from advancing.
Even though it was vigorously opposed by the banking lobby, the member business lending legislation enjoyed significant support in the House and Senate. At the end of the day, however, the procedural challenges described earlier proved insurmountable, and there was no way to get a vote on the bill’s merits.
Anyone who wonders what would have happened to the member business lending bill had we proceeded through the procedural gauntlet need look no further than the bill to extend the Transaction Account Guarantee (TAG) program, which was defeated on a budget point-of-order vote.
An important lesson emerges from today’s Congressional gridlock: When credit unions and banks fight each other on Capitol Hill, they both lose. When they work together, however, they can break through the gridlock.
That’s not to suggest we should capitulate on our agenda. But it does suggest that we need to better appreciate the realities of credit union versus small bank influence in Congress, address those realities, and build a system that will allow the passage of important credit union legislation in the future.
This is a key goal of our Plan to Win initiative.
3. Keep in mind that a bill doesn’t need to become law to have a positive effect. The examination fairness bill is a good example of this. This bill gave Congress an opportunity to investigate the challenges and occasional inconsistencies of the examination process.
Regulators were made aware of Congress’s concern with exam issues. CUNA staff also addressed these issues with regulators.
Following the hearing and our direct complaints to regulators, we heard anecdotal reports of improvements. But we know the improvements aren’t uniform, so we continue to keep Congressional pressure on the regulators to improve the examination process.
4. Have a “Plan to Win.” CUNA and the state leagues have been working on this plan for the past two years. It builds on our very successful advocacy efforts by developing and executing a comprehensive grassroots, political, legislative, and communication strategy.
This strategy engages all members of Congress and moves them to a position of stronger support for credit unions.
The Plan to Win also seeks to re-establish a grassroots expectation within the movement. It gives credit unions tools for educating their members and encouraging their engagement in grassroots advocacy.
Members place a high level of trust in their credit unions—they’re not just users, they’re owners. If credit union leaders aren’t educating members about the challenges we face, and if we’re not asking members to advocate on behalf of the institutions they own, are leaders really acting in members’ best interests?
The credit union movement’s collective voice must be united and it must be strong, because there are plenty of voices speaking against us.
To break through the gridlock, we must make sure that those who are most invested in credit unions—the 96 million members—understand the challenges we face in Washington and are prepared to make their voices heard.
While there’s almost nothing we can do to break the gridlock in Washington, there’s much we can do together to maneuver through the gridlock and advance an agenda that helps credit unions serve their members.