What Can Congress Deliver?
CUNA's legislative agenda encourages lawmakers to remove barriers that keep CUs from fully serving members.
It’s almost impossible to forecast now specific legislative activity that might be important to credit unions the rest of the year. On the other hand, Congress has been somewhat predictable in recent years.
If past performance is any indicator of the future, the safe bet is on Congress doing little to either benefit or hurt credit unions—absent some sort of crisis or unforeseen event.
If anything, the newly installed Republican-controlled Congress is more interested in reducing the regulatory burden on all sectors than adding new burdens. Whether Congress can remove barriers for credit unions in any meaningful way remains to be seen and is, in part, up to the credit union system.
As we prepare a legislative agenda aimed at removing barriers, we ask three questions:
1. What do credit unions need;
2. What can they support; and
3. What can Congress accomplish?
It’s important to look at these three questions together. Obviously, our legislative agenda shouldn’t include items or initiatives credit unions do not need.
It’s important to keep in mind, however, that “want” and “need” are different animals. Congress—especially in a period of gridlock—isn’t interested in what groups or industries want. They need to know what we need.
So, whatever we seek from Congress, we must clearly and convincingly demonstrate that the system needs it.
The second question isn’t as easily answered as the first, but it’s more critical: What can we demonstrate support for?
The credit union system enjoys a grassroots potential that is almost unmatchable. Not only do we have credit union advocates in every congressional district, we’re developing the means to activate the nation’s 102 million credit union memberships.
And guess what? The folks in Congress know it, and they have an expectation that we will use it. Our numbers and potential are meaningless if we don’t have the capacity and the willingness to engage members on behalf of our strategy.
We have found success in the past on Capitol Hill when policies and initiatives have affected a high percentage of credit unions and members. When the initiatives haven’t, we have faltered.
This could lead one to suggest that we should aim, therefore, for the items that benefit the most credit unions and members—and that would be partially correct.
But a proposal that would affect the vast majority of members and credit unions isn’t by itself a strong indicator of its success.
We also need to consider the third question: What can Congress deliver? That question often is overlooked, but it’s absolutely essential. If dysfunction and gridlock cripple Congress, the legislature can hardly be expected to enact the major reforms or enhancements many credit unions seek.
We must understand and take advantage of what Congress can accomplish—even if the answer is “quite little.”
We’ve had success with this in the past. In the 113th Congress, we got Congress to enact legislation that extends share insurance coverage to lawyer trust accounts. And in the 112th Congress, we successfully pursued legislation that eliminated a requirement that credit unions put a physical placard on ATM machines.
These victories demonstrate that if we accurately assess what Congress can deliver and we apply our efforts to getting Congress to take action, we move forward.
In an environment in which victory begets victory, these small steps are critically important.
We’ve progressed on our priorities in Congress even when Congress hasn’t been able to act. For instance, we secured significant improvements to the Consumer Financial Protection Bureau’s (CFPB) privacy notification regulation thanks to a strong legislative advocacy effort.
Likewise, NCUA made significant modifications to its risk-based capital proposal in large part because three-quarters of Congress weighed in on our behalf. A bill does not have to become law for credit unions to secure a legislative victory or, more important, to remove a barrier.
We’re actively pursuing an agenda that encourages Congress to remove the barriers that keep credit unions from fully serving their members. The individual pieces of this agenda may seem quite small. But taken together, these efforts represent a significant step toward removing these barriers.
In the 114th Congress, we’ll continue our efforts to preserve the credit union tax status as Congress engages in comprehensive tax reform. We also will pursue several bills dealing with reforms to the CFPB and improvements to its rules, as well as legislation that:
• Gives credit unions the same eligibility requirements for Federal Home Loan Bank membership as community banks;
• Makes it easier for credit unions to lend in rural areas;
• Improves the examination process; and
• Permits credit unions to access supplemental forms of capital.
We’re also continuing our “Stop the Data Breaches” effort, and look forward to the introduction of comprehensive legislation that includes a federal notification standard, new data security standards for merchants, and provisions that improve the process for reimbursing credit unions for costs they incur as a result of the breaches.
Some of these efforts fit more squarely than others into the category of “things Congress can accomplish.” But if the system can demonstrate support for the agenda and press it with Congress, we should continue to see progress with our efforts on Capitol Hill.
‘They can count’
Whatever else one might say about politicians and elected officials, those who are successful have one thing in common: They can count.
That is, they can count how many constituents are affected by a pending piece of legislation—and they can count how many votes they need to keep their job on Election Day.
With that in mind, what do credit unions bring to the table in terms of numbers that lawmakers can count?
In 2014, U.S. credit unions crossed a major threshold: 100 million memberships. CUNA, leagues, and credit unions celebrated this achievement with events, contests, and media announcements—both traditional and social.
And rightfully so: This milestone powerfully demonstrates the degree to which more American consumers are choosing credit unions as their best financial partner.
Yet 100 million credit union memberships represent something else when it comes to removing the legislative
and regulatory barriers that hinder credit unions from better serving all those consumers: We represent millions of American voters and constituents.
Ultimately, if the credit union movement is to expand its charter and remove regulatory burdens—to say nothing of
protecting our tax status—we have to constantly remind lawmakers how many millions of Americans belong to credit unions. Better yet, we have to empower those millions of consumers to act on credit unions’ behalf as member-owners of these financial cooperatives.
Unfortunately, this is where those of us in the credit union world too often let down our members and ourselves, as credit union leaders.
In an exhaustive research project involving 70,000 credit union members in 2013, CUNA found that 78% of members agree their credit union could contact them about proposed laws impacting how their credit union operates and ask that they take action to contact elected officials (“Study shows value of advocacy, member education,” p. 28).
Moreover, credit union members in focus groups tell CUNA that it’s their credit unions’ responsibility to inform them, as owners of the cooperative, of legislative and regulatory issues that affect the institution’s success.
Credit union members— the very members we serve and work for—tell us they want to hear about these issues and are willing to do something about them for the good of their credit union. So, why do we too often fail to let our members do the talking for us?
Sure, many credit union CEOs, managers, and volunteers travel to Washington, D.C., for CUNA’s Governmental Affairs Conference or Hike the Hill, or respond to the latest CUNA or league action alert to send a quick email to Congress.
But if we aren’t engaging our millions of members in these fights directly, isn’t it like taking the proverbial knife to a gunfight?
CUNA’s research found something else of note as well: Not only are members willing to listen to their credit unions on legislative and regulatory issues and consider taking action when asked, the very act of asking them can actually increase their membership loyalty and wallet share.
In one survey, some 86% of credit union members who previously had been asked to take action on a legislative priority—in this case the successful Don’t Tax My Credit Union campaign—said they’re more likely to do a greater share of their personal banking at their credit union in the future.
1. America’s Credit Union Conference: CUinDenver2015.org
2. Environmental Scan resources: cuna.org/strategicplanning
3. Member Activation Program: cuna.org, select “grassroots & political action”
4. Unite for Good: uniteforgood.org
The reason is simple: Asking members to engage lawmakers on behalf of credit unions’ legislative or regulatory priorities requires reminding members what makes credit unions different and special.
Too often we take for granted that credit union members “get it.” We assume they know, for example, that their credit union is a not-for-profit financial cooperative, that it doesn’t pay corporate income taxes, or even that they’re member-owners.
Many times, even those members who are the biggest users of credit union services are unaware of these basic facts. Years of consumer research by CUNA has found this to be true over and over again in markets throughout the country.
But there’s a silver lining: If you tell members the credit union difference, they pick up on it fairly quickly. After all, they already have a vague sense they’re getting a great deal on whatever financial service they use at their credit union.
Education lets them know why they’re getting such a great deal. Members can connect the dots between the money they save at their credit union on the one hand and the structure that underpins and enables that value proposition on the other.
Moreover, the education process provides a powerful reminder to those members that they ought to shop first at their credit union the next time they need a car loan, credit card, or mortgage.
And if you tell these same members that taxation, excessive regulatory burden, or expensive merchant data breaches, for example, might threaten this value proposition, they’ll now go to the barricades on your behalf.
It’s a win-win for credit unions. Communicating with members early and often on key advocacy issues reinforces their membership loyalty and grows wallet share, all while also engaging them in our fights in Washington and in state capitols.
Credit unions surpassed 100 million memberships in 2014, and indications are that membership growth is increasing at a clip of 4.4% a year. Just imagine how much we could get done in Washington and in state capitols if we could truly mobilize millions of credit union members on behalf of our industry’s priorities.
And if in the process we could turn these members into more loyal users of credit union services, we’d be crazy not to engage them, right?
RYAN DONOVAN is CUNA’s chief advocacy officer. Contact him at 202-508-6750 or at email@example.com.
TREY HAWKINS is CUNA’s vice president of political affairs. Contact him at 202-508-6712 or at firstname.lastname@example.org.