Divided Congress: What does it mean for credit unions?

This entry was posted by Wednesday, 10 November, 2010
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Ryan Donovan

From Ryan Donovan:

Several months ago, a video of a man actively pondering the meaning of a double rainbow in Yosemite National Park became an Internet sensation.  “Double rainbow!  What does it mean?”  No one who saw that video will forget it anytime soon, and I couldn’t help but think about that video last week when, in the aftermath of Election Day, I was bombarded with the question, “What does a divided Congress mean for credit unions?”

The short answer is “not much.”  Here’s why:

1. Congress was already divided.  While the next Congress will be indisputably divided, a strong argument can be made that the current Congress (now in lame-duck form) is already divided, despite the fact that Democrats hold majorities in both chambers.  In an environment where 60 votes are necessary to pass legislation in the United States Senate, the Republican minority in the Senate has wielded significant power, tempering the Democratic-controlled House of Representatives.  In January, Republicans will control the House of Representatives and Democrats will have a majority (note the word choice) in the United States Senate.  Still, it will take 60 votes to pass anything in the Senate, and the group that can put 60 votes together on legislation will control the Senate.  A divided Congress returns to Washington; it is simply divided in a different way.

2. The legislative outlook is unchanged despite the election.  For credit unions, the legislative outlook in the next Congress is the same today as it was before the election.  Housing finance reform and the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act will be the top issues before the Financial Services Committee and the Senate Banking Committee.  Capital reform will be among the legislative initiatives credit unions pursue in the new Congress.  The outcome is dependent on the proponents putting together the votes to enact legislation.  And in today’s political environment getting anything done in the new Congress will require putting together 218+ votes in the House (including the Republican leadership) and assembling a coalition of 60 votes in the Senate.  It’s a high hurdle no matter who is in charge; and in a politically charged presidential cycle, it becomes even more difficult.

3. Credit unions have balanced support in Congress.  Credit unions have earned balanced support from Members of Congress on both sides of the aisle.  While we certainly have Democrats and Republicans in our midst, the credit union system is not Democratic leaning, like labor unions; and it is not Republican leaning, like the Chambers of Commerce.  When a wave, like the one we saw last week, hits our ship, it is our balance that keeps us from floundering.  While we are not aligned with either party, we do have a very vested interest in seeing credit union friendly candidates elected to office.  So, we were rightfully disappointed to see one of our champions lose reelection last week.  This particular loss cannot be taken lightly, but it is also not the end of the world.  Credit unions are fortunate to have many friends in Congress, including a number who will be sworn in for their first term in January.  In most cases, these candidates won election thanks to help from the credit unions in their district, including several credit unions that went to their members to encourage them to vote.  While we did not win each race in which credit unions actively participated, in every instance, the credit union effort helped to turn out the vote for the credit union friendly candidate.  We should embrace credit union members being politically active in supporting our issues because no one has a more vested interest in a credit union-friendly Congress than credit union members themselves. 

To credit unions, it should not necessarily matter whether Democrats control Congress, Republicans control Congress or if there is a divided Congress.  What matters is that there are plenty of credit union supporters in Congress – and plenty of voters ready to elect credit union friendly candidates.  Last week’s electoral wave did not crush the credit union vessel by any means, but over the next two years it is our responsibility to work to solidify and expand the base of support for credit unions in Congress.

Ryan Donovan is the Vice President of  Legislative Affairs at the Credit Union National Association.


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