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Powerful Cause – Positive Impact: GAC Takeaways

Posted by on Wednesday, 13 March, 2013

On more than one occasion since the end of this year’s Governmental Affairs Conference, I’ve been asked what my takeaways are.  To be honest, it’s difficult to have perspective so soon after such an event; however, as I contemplated the question, I was repeatedly drawn to the theme of this year’s GAC — Powerful Cause – Positive Impact.  These four strong words both individually and collectively describe my takeaways from this year’s CUNA GAC.

Powerful:  On the first day of GAC, I tweeted a photo of 4,200 credit union advocates in the Convention Center hall.  Most advocacy groups envy the turnout and passion of our GAC.  Sometimes, that can be lost on us.  On Wednesday night, after our hill visits, a credit union CEO pulled me aside at a reception to talk about his day on the Hill.  He said to me, “There must have been something big happening on the Hill today because it was really hard to get around.”  Yes!  When you unleash several thousand advocates in the halls of Congress, people take notice; when they understand that these folks represent 96 million members of credit unions, they really start paying attention! What we did last week was a demonstration of the power of our cause.

Compressed GAC

Cause:  The numbers are impressive but they alone do not make the impact; rather they serve to amplify our cause.  Credit unions every day are fulfilling their mission to promote thrift and provide access to credit to their members.  The memory of the financial crisis is still fresh in the minds of most on Capitol Hill; and what credit unions did during the financial crisis to help their members is an ultra-current reminder of the importance of our cause.  Our efforts last week helped us make the case that credit unions are as important to consumers and small businesses today as they have ever been.

Positive: When briefing groups that visit Washington on Hike the Hill, I often remind them that our goals in advocacy are to encourage Congress to enact legislation that helps them serve their members; defend credit unions against legislation that makes it more difficult to serve their members; and to do both of these things while maintaining the positive image that credit unions earn through the service to their members.  One of the great things about advocating for credit unions is the fact that we are almost always for something and only rarely against something.  Even when defending the credit union tax status, we have the opportunity to advocate for the tax status – and this positive perspective makes a difference on the Hill.

As a Congressional staffer, a League staffer and a CUNA staffer, I have had the fortune of participating in about a dozen GACs.  Each is different, of course, reflective of the time and conditions under which credit unions are operating.  This year, the positive energy and excitement was palpable.  And why shouldn’t that be the case?  Credit unions are coming off some of the best years in their history; the size of the movement has hit an all-time high; membership is growing at record pace.  There is a lot for the credit union system to be excited about, and that excitement and pride translated into our advocacy message on Capitol Hill.

Impact: So what was the impact of our powerful cause and powerful message?  Based on the early feedback we’re receiving from credit union participants and Congressional participants in last week’s Hill meetings, it is clear we had a positive impact.  Our message on the credit union tax status has received nearly universal acceptance; members of both sides of the aisle are beginning to better understand how regulatory burden holds credit unions back; and we’re seeing more Members of Congress embrace the notion that credit unions that are serving their members well should be allowed to continue to do that.

Everyone who participated in the GAC should take pride in what took place last week; but we should also be mindful that advocacy is a process, not an event.  Bill Cheney opened the GAC with a call for credit unions to Unite for Good around a vision that Americans choose credit unions to be their best financial partner.  It can be said with confidence that credit union advocates in the days following the unveiling of this vision united for good on Capitol Hill to make a positive impact on behalf of their powerful cause; however, we must continue to build on this momentum in order to fulfill the vision we share.


Avoiding the Procedural Trap and Living to Fight Another Day

Posted by on Tuesday, 29 January, 2013

Let’s just pick up right where we left off in my last post

“While nothing is certain, the promise of a vote seems as firm as possible at this stage.  Winning the vote depends on our ability to solidify and expand on the support we have in the Senate.  We’ll need the people most invested in the success of this legislation to speak out and speak loudly.  The deck is stacked against us:  while the bankers who oppose us are formidable, our greatest challenge to getting this done is the fact that the Congressional process has essentially collapsed.  We’re fighting not just the banks, but also historical Congressional gridlock.”

So, what happened?  Why was there no vote on MBL?

Credit union executives, volunteers and small business members showed up in December – hundreds took to Capitol Hill on a cool December afternoon.  Tens of thousands wrote their Senators and Representatives.  There was even a degree of interest on the part of the media in Washington and elsewhere in the country.  The problem we ultimately ran into was that the same gridlock that all but stopped substantive lawmaking in the 112th Congress dealt our MBL bill a critical setback just as our momentum was at its apex:  it was impossible to get the up or down vote on the merits. 

If anyone wonders what would have happened if we had pursued the vote we were offered, look no further than the outcome of the vote on the bankers’ bill to extend the Transaction Account Guarantee (TAG) program, which failed on a procedural vote to waive a budget point of order.  The same thing would have happened to our bill.  In fact, the two procedural votes on the TAG bill are very instructive with respect to what was happening in the undercurrent of the Senate floor debate in December. 

Ramping up for a battle on filibuster reform here in January, Democrats and Republicans were using every angle to make their points.  Senate Republicans, frustrated that the Democratic majority regularly blocked them from offering amendments to legislation on the Senate floor, had been filibustering the “motion to proceed” on almost every bill in the Second Session.  To prove their point, they allowed the TAG to go to the floor by voting for the motion to proceed, and once the Senate began consideration of the bill, Democrats used parliamentary procedure to restrict the consideration of amendments.  When that point was made, conservatives objected to the bill – at our urging – because it violated “pay as you go” budget rules, and the bill died when the Senate did not waive those rules.

The MBL bill’s fate would have been exactly the same.  There is no doubt that the bankers would have encouraged the same Senators who objected to the TAG bill to raise objection to the MBL bill, and our legislation would have died largely as a result of a debate on filibuster reform.

In Washington, there is a vast difference between losing a vote and not having a vote.  We opted not to take a quixotic vote to preserve an opportunity to pursue the issue again this year because the setback from losing a vote – even on a procedural motion – would have brought to a fast and final end any reasonable chance we had to increase the business lending cap.  That outcome wouldn’t have been fair to the thousands of advocates who have worked to advance this issue over the years, and it certainly wouldn’t have been fair to the credit union small business members who need and want access to additional credit from their credit union. 

As the new Congress gets underway, we’ll continue to press Congress to permit credit unions with business lending experience to continue to serve their members.  The good news is that while the deck is still stacked against us, the election brought us new supporters in the Senate and the House.  We expect the bills to be reintroduced in both chambers early in the session, and we’ll work closely with our Congressional champions to maneuver the gridlock on Capitol Hill that seems to worsen each week. 

 


Advancing a Legislative Agenda in the Face of Historic Congressional Gridlock

Posted by on Wednesday, 10 October, 2012

Stop me if you’ve heard this before:  What’s the opposite of progress?  Congress.

Whether your reaction is a groan or a quiet chuckle, we react to that joke because we all know there is an element of truth to it, especially these days. 

The 112th Congress stands to be the least productive Congress since World War II.  Of the approximately 11,000 bills introduced so far in the 112th Congress, only 169, or 1.5%, have been enacted into law*.  This enactment rate is just over half of that of the previous Congress, and less than half that of the 110th Congress. To get a sense of the historical magnitude of the gridlock, consider the fact the 80th Congress, dubbed the “do nothing” Congress by President Harry S Truman, enacted 7.5% of the bills introduced.  Since then, Congress has generally enacted between 3% and 6% of the bills introduced; the exceptions have been the Congresses in which the number of bills introduced has been substantially more than the norm.

Taking a closer look at the number of bills actually enacted, the gridlock in the 112th Congress is further magnified in comparison to its modern predecessors, which, on average, enacted 609 bills into law.

This is not to suggest that the 112th Congress is sitting idly by doing nothing.  Each chamber has passed its share of bills (613 have passed the House; 519 have passed the Senate), but few are getting to the finish line.  Throughout the Congress, the House has engaged in a practice of sending bills to the Senate that have no chance of being considered by, much less passing, the upper chamber.  While the Senate’s quantity of bills seems on par with its counterpart, most of these bills are honorifics; substantive lawmaking has been the exception not the rule.  Between April 2011 and August 2011, the Senate did not pass a single bill “regular order,” meaning it was brought to the floor, debated, opened to amendment and passed.  Digging deeper and looking at the committee level, the Senate Banking Committee, the committee to which the Credit Union Small Business Jobs Act has been referred, has reported out only four pieces of legislation – the Export-Import Bank Reauthorization, an Iran Sanctions bill, the Flood Insurance bill and a resolution establishing the committee’s budget. 

Congress’s ability to get even the most routine legislation enacted has been severely curtailed.  Legislation that historically receives broad bi-partisan support, like the farm bill, the surface transportation bill and the defense authorization bill, has encountered significant resistance and delay.  Congress enacted none of the appropriations bills before the end of the fiscal year.  Hyper-partisanship rules on Capitol Hill; consensus is elusive; gridlock is the result.

Now, there is a strong argument to be made that the best Congress is the Congress that does the least, but that’s not the case when you’re advocating an agenda that requires Congressional action.  The current legislative and political environment has made it extraordinarily challenging for credit unions – or any other group for that matter – to move its legislative agenda.

With Congress recessed until after the election, the focus now turns to the post-election – lame duck – session.  While Congress has already punted the appropriation process into the next Congress by enacting a continuing resolution which funds the government until March 2013, there is no shortage of issues which need to be addressed before the end of the year.  The failure of the Super Committee to produce a recommendation to reduce the deficit has set up a sequestration process which will result in significant spending cuts to defense and non-defense programs, unless Congress acts to reduce the deficit before the end of the year.  There are several tax provisions, including the Bush tax cuts, which will expire unless Congress acts.  The farm bill and the highway bill remain on the table.

Assuming the election produces the status quo – that is, that the president wins reelection, the House remains in Republican control and the Democrats retain their majority in the Senate – one could foresee the potential for a robust post-election session.  It is reasonable to assume that some of the acrimony dissipates post-election; defeated or retired members may feel a bit more freedom to participate in compromise approaches to the outstanding issues; and the leadership may have greater incentive to get issues off the table so they don’t hang over the next Congress.  However, even if those assumptions play out, there is no guarantee that it will produce solutions to problems that have divided Congress and the nation for so long. 

The clock provides significant leverage to those who seek to keep things from happening.  When Congress returns on November 14th, they will face a short week before Thanksgiving.  When they return after Thanksgiving, there will be just four weeks until Christmas.  After Christmas, the Congress has only a week until it expires and the new Congress convenes.  It’s a remarkably short period of time for a Congress which heretofore has demonstrated almost no ability to enact even the most routine pieces of legislation much less solve the nation’s greatest problems of the day.  Frankly, the fact that the chambers haven’t even been able to agree when to recess speaks volumes about the potential for the lame duck.

Prospects for a robust lame duck session, complicated under the best of circumstances, may completely evaporate if the elections result in a change in control of the presidency or either chamber of Congress.  If the president fails to win reelection, Congressional Republicans have little incentive to work with him after election; if Republicans gain a majority in the Senate, the Senate Republicans could effectively block all action until their numbers improve after January 3.  Likewise, if the Democrats were to hold the presidency and the Senate and pick up the House, it is not outside the realm of possibility that they would punt big decisions into the 113th Congress.

So, where does that leave groups, like us, who have common sense, job creating legislation ripe for consideration before Congress?  We’ve been promised a vote on the Credit Union Small Business Jobs Act before the end of the year.  Will we get the vote?  Will we win the vote?  Can we get this done? 

The answer to all of these questions can be “yes.”  Congress will be here for several weeks after the election and they will have measures on the floor.  While nothing is certain, the promise of a vote seems as firm as possible at this stage.  Winning the vote depends on our ability to solidify and expand on the support we have in the Senate.  We’ll need the people most invested in the success of this legislation to speak out and speak loudly.  The deck is stacked against us:  while the bankers who oppose us are formidable, our greatest challenge to getting this done is the fact that the Congressional process has essentially collapsed.  We’re fighting not just the banks, but also historical Congressional gridlock.


*All statistics are as of August 28, 2012, unless otherwise noted.


Coalition Building: Collaboration in Advocacy

Posted by on Tuesday, 17 July, 2012

When I present advocacy training seminars or teach my class at CUNA Management School, I usually talk about the ten basic lobbying principles:  unity, clarity of objectives, discipline, subject matter expertise/preparation, perseverance, adaptation, opposition research, credibility/trust, key actors and coalition building.  I intend to discuss each of these principles in future blog posts; this installment is dedicated to coalition building and published in conjunction with a presentation that I am giving to the World Council of Credit Unions Conference in Gdansk, Poland.

If you attend any credit union system conference, I can guarantee you that someone will talk about collaboration – working with others to accomplish a specific task.  Collaboration occurs in just about every aspect of the credit union movement, even in the way we approach advocacy.  In fact, given how challenging it has become to get Congress to move even the most basic piece of legislation, collaborations with other interested parties – coalition building – is an essential part of a successful advocacy plan.

At a basic level, there are a lot of advantages to working with other groups that share our interests in an issue. 

  • A coordinated approach is almost always more effective than two parties with similar interests working on their own.  Multiple parties mean additional resources can be brought to bear to fight what may be an expensive and long battle.  Working together allows each group to bring their strengths to the table, whether they are financial, access, knowledge or grassroots. 
  • Joining forces also brings together additional perspectives.  Coalition members may want to see a policy advanced for different reasons.  Having advocates that approach the issue from a different perspective can be valuable as long as the end goal is truly the same for all involved.  In fact, multiple perspectives can help policymakers draw the logical conclusion that the impact of the proposal is broader than if just one group was pushing for the bill. 

However, there are also risks associated with being a part of a coalition.

  • Being a part of a coalition may mean partnering with groups that oppose your efforts on other, unrelated issues.  On several issues, CUNA has partnered with groups, like banking trade associations and retail trade groups, which oppose significant aspects of the credit union legislative agenda.  We work together when we can, and we find we are more successful when we do.
  • Participating in a coalition requires the surrender of a degree of autonomy.  Group deliberations lead to group decisions; the path the coalition decides to take may not have been the path an individual participant would have followed.  However, this risk can be managed by leveraging the strengths you bring to the table.   
  • What is more challenging and more important to manage is the exposure of an organization’s credibility, resources, strengths and weaknesses.  Part of the decision matrix when joining the coalition has to be answering the question, “How will this make us look?”  Another important question to consider is whether the effort is worth the cost, actual and reputational.  This is especially important on peripheral issues that may be more important to the other coalition members than they are to your group. 
  • Finally, it is also important to keep in mind that when you are a part of a coalition, your partners get an insight on your strengths and weaknesses, which could help them in a future legislative battle. 

Coalitions are not a new phenomenon in credit union advocacy – the Campaign for Consumer Choice is a good example of the effectiveness of a broad coalition effort led by CUNA.  I remember this effort because, as a Congressional staffer, I was on its receiving end.  In fact, my perspective on coalition building has been shaped significantly by the time that I spent on Capitol Hill and the number of times that I saw coalition efforts work.  If you can manage the risks, there are often many good reasons to join or try to form a coalition on many issues. 

A Coalition Needs to Be More Than a List of Names:  The MBL Experience

One of the most important legislative issues for credit unions is, of course, the effort to enact legislation allowing well-capitalized credit unions with significant business lending experience to lend beyond an arbitrary statutory cap imposed in 1998.  The beneficiaries of this legislation will not only be the credit unions that engaged in this additional lending but also the small business-owning credit union members that are able to receive funding and the people they hire as a result.  We estimate that credit unions could lend an additional $13 billion to small businesses in the first year, helping them to create at least 140,000 new jobs.  This legislation (S. 2231 / H.R. 1418) is fiercely opposed by the banking sector, and has historically been viewed by many in Congress as a bank versus credit union issue.  But really, it’s about small businesses. 

In an effort to not only change the conversation but also demonstrate the impact of the bill, we organized a coalition of interested parties to help achieve its enactment.  At first, the goal was to put together a diverse and growing list of organization names to show there was support outside the credit unions system.  Today, there are over 30 organizations which have publicly supported our efforts to enact this legislation – conservative and progressive think tanks, small business organizations and cooperative organizations.

Over the past few years, we have been able to develop our coalition into something more than just a list of names; but it did not happen through a flip of a switch.  Building a strong coalition requires a dedication of resources.  It involves recruiting members, educating them, keeping them informed and urging them to take action at the appropriate time. 

In the beginning, we did not ask much of these groups, only that they allow us to use their name in support of the bill.  We were seeking to broaden our base of support.  Over time, however, we found we needed more from our coalition partners; and we found they were all willing to give more to the effort!  We first asked our coalition partners to engage in blog posts and media opportunities touting the importance of credit unions as part of the solution to the small business credit crunch.  Then, we encouraged the groups to include information about our legislation in their talking points on Capitol Hill.  In February, we organized a “Small Business Hike the Hill” where credit unions and our coalition partners brought small business owners to Washington to speak with lawmakers about the legislation.  And, when Senate Majority Leader Harry Reid announced his intention to call a vote on the MBL legislation, our coalition partners responded by asking their members to call on Congress to pass the bill.  This response would not have been possible without the effort we’ve put into developing the coalition over the last three or four years. 

Just as the ability of our coalition to take action did not develop overnight, the size and composition of the coalition did not develop immediately.  It took a lot of time to get to 30 members.  I can remember when we used say we had “over a dozen,” and meant 13!  The size of our coalition grew as we perfected our alliance, and this process continues. 

In general, more partners are better – we’re continuing to seek additional partners – but it is also important to have the right partners.  Our coalition includes a number of very large and reputable organizations; their participation has helped us attract additional partners. However, absent from our coalition are two of the biggest small businesses groups in the United States.  The primary reason these groups have not weighed in on our behalf is the influence the banks have on their membership.  Were they to join the coalition, the credibility of the group would surely increase.  Fortunately, the coalition has not been hindered by their absence.

Thanks in large part to the active participation of our coalition partners, we were able to secure our first conservative Senate cosponsor; we added a dozen House cosponsors to the bill after our Small Business Hike; and during our major advocacy push in the spring, we added 16 new cosponsors bringing our total to 140.  All of this has well positioned us to win a vote on the MBL legislation later this year.

The Challenge of Working With Competitors:  The Interchange Fees Experience

Before the MBL coalition was formed, we joined the Electronic Payments Coalition (EPC), the financial industry coalition to combat interchange fee legislation.  The debate over debit interchange fee regulation ended up being the fiercest trade association battle fought before Congress in years, pitting the financial services sector against the retail sector.  An unprecedented amount of resources were applied over what was essentially a battle over pennies on debit card transactions.  But, of course, those pennies add up very quickly.

The EPC is a full time coalition, comprised of the payment card networks, the six major financial services trade associations, several large banks, and at least three credit union service organizations.  It is managed by an outside lobbying firm and also retains a communications firm.  The participants in this coalition have the same goal: opposition to the regulation of interchange fee rates.

As with any coalition, each of the major participants in the EPC brought strengths and weaknesses to the table.  The payment card networks, big banks and their trade associations brought significant financial resources and invaluable legal and technical expertise.  However, they also brought baggage; coming out of the financial crisis, the big banks did not have a stellar reputation, and few on the Hill were looking to do them any favors.  The payment card networks had similar reputational issues, and they were the main targets of the merchants’ legal and legislative campaigns.  This is why the members of the EPC needed credit unions and small banks as part of the coalition.  While we did not have the financial resources to match the larger partners, we had a reputation of treating our members well, performing admirably throughout history, and, most importantly, we brought significant grassroots capability to the table.  Between the credit unions and small banks, there were financial institutions in every state and every Congressional district that would be adversely affected by the interchange amendment (notwithstanding the small issuer “exemption”), and our job was to make sure that story was told.

Over time, the members of the coalition naturally played to their strengths, but one of the significant challenges to success was the fact that many of the partners were competitors in the marketplace; many of the partners operated in different parts of the market; and some of the partners (ie. credit unions) had completely different business models.  As a result, there was a level of natural wariness that could never be displaced.  Unfortunately, this contributed to inefficiencies in the exchange of information and intelligence and may have ultimately hampered strategic execution. 

We and the small banks probably came the closest to overcoming these challenges, for we truly were in the same boat – seemingly beneficiaries of a meaningless exemption that complicated our efforts to defeat (and then repeal) bad public policy.  We met frequently with the small bank lobby – in our offices and theirs – and our staff spent countless hours working closely together developing lobbying strategies, organizing Hill meetings and considering legislative alternatives. A year removed from the major vote on the interchange amendment in the Senate, I’m am still pleased with the working relationship we developed with our small bank counterparts on interchange. 

What we learned from the interchange process is that sometimes circumstances force you into alliance with groups that have similar but somewhat competing interests.  In these situations, it is important to do everything within your power to manage those challenges, maintain credibility and play to your strengths.

Sometimes You Need a Coalition But Cannot Form It Yourself:  The ATM Fee Disclosures Experience

In the summer of 2011, I was approached by a credit union CEO on a Hike the Hill in Washington regarding an issue with ATM fee disclosures.  After learning more about the issue and what credit unions were doing to comply with the regulation, we decided that the best remedy was to try to get Congress to remove the statutory requirement while at the same time to seek relief from the Consumer Financial Protection Bureau.  Since this was an issue that did not only affect credit unions but also any ATM operator, we recognized early that we would be more successful if we tried to bring together a coalition of affected parties. 

We also felt that we would probably have greater success in building the coalition if we were not perceived as the leader of the coalition, so we identified an intermediary group that represented a significant part of the ATM industry and worked with them to form a coalition of banking trades, merchant groups and other ATM operators.  Many of the groups that fought with each other over interchange united to try to attempt to remove this obsolete regulatory requirement.

In contrast to the interchange coalition, the participants had incentive to trust each other because for all intents and purposes they were in the same boat.  The members of this coalition leveraged their contacts on the Hill to generate broad-based bipartisan support for the legislation.  We were able to develop and execute a strategy that resulted in the House of Representatives approving the legislation we supported (H.R. 4367) by a vote of 371-0.  Thanks to the coalition’s efforts, not a single member of the House of Representatives articulated opposition to the bill during its consideration in the Financial Services Committee or on the House Floor.

The ATM issue is an example of coalition building in the financial services sector at its best.  We worked together to generate broad bipartisan support, and played to our strengths to neutralize potential opposition.  And today, we find ourselves working on moving this bill through the Senate.

Takeaways

The framers of our Constitution purposefully made it difficult to enact legislation.  Even though the modern Congresses have turned what should be difficult into something that is nearly impossible, it is probably a good thing that it isn’t easy to change public policy.  There is a strong argument that we are better served by consistent policy that changes in moderation over time than legislative changes enacted with unpredictable fluidity.  But for individuals and organizations charged with affecting change to public policy, throwing up one’s hands and saying that it is too difficult therefore it should not be attempted is not an option.  We must find a way forward, and coalitions are important part of an overall lobbying strategy.   

When engaging in coalitions, it is important that each of the participants plays to their strengths, that your actions maintain and advance your credibility, that you take steps to manage the challenges presented by the coalition, you take time to perfect and build the alliance, and that you do what you can to deflect controversy by remaining actively engaged in the coalition’s strategic direction.


Behind the Scenes of the Effort to Eliminate Unnecessary Burdens

Posted by on Thursday, 28 June, 2012

As I often say to credit union groups, we have three goals in the legislative advocacy department:  (1) encourage Congress to enact legislation that makes it easier for credit unions to serve their members; (2) protect credit unions from legislation that makes it more difficult to serve their members; and (3) do both of these things while at the same time maintaining the “white hat” image that credit unions earn every day through the service to their members.  This week, there has been progress in Washington on that first goal.

Yesterday, the House Financial Services Committee approved our ATM Fee Disclosure bill by a voice vote.  At issue is the placard ATM operators must place on the outside of an ATM machine disclosing to consumers they may be assessed fees for using the machine.  The legislation would eliminate this requirement, reducing regulatory burden for every credit union with an ATM machine.  Today, it is a step closer to enactment.

CUNA has been very active in its support of this legislation from the beginning.  In fact, the bill was inspired, in part, by a participant on a Hike the Hill visit last summer that pulled me aside at a reception and explained the problem to me.  When I heard it, I had the same reaction as many of the Hill staff and Members of Congress to whom I have since explained this – disbelief.  I was told that a cadre of attorneys was seeking out vandalized ATM machines and then suing the credit union or bank.  Some have even suggested that the folks brining these suits against credit unions and banks are some of the ones who are vandalizing the ATMs.  In fact, when we started talking to folks on the Hill about this, someone told me that they had seen video of someone purposely removing the sticker.

Anecdotes are always an important part of an advocacy strategy, but it also helps to have data that show the problem is widespread.  It wasn’t very long after that first conversation that credit union CEOs began to tell CUNA the extent to which they go to document their compliance with this regulation – sending staff out on a regular basis to photograph the sticker; and then, I saw a vandalized Chase ATM while walking back to the office from a meeting at the Department of Treasury.  As we did more work on this issue, we learned that over 100 credit unions had been sued over this issue.  Our case had been made stronger by this evidence.

Last summer, CUNA reached out to the Electronic Funds Transfer Association and sought to build a coalition of interested parties which today includes banking trade associations and, believe it or not, retail trade associations.  Yes, the groups that brought Congress its fiercest industry battle in years, united to work to reduce regulatory burden.  We took steps over the next several months to educate key leaders, identify appropriate sponsors for the bill, and engage groups which, all things being equal, may have naturally opposed legislation of this nature.  CUNA also went to the CFPB to encourage a regulatory remedy, an action which led the newly established bureau to seek public input on whether the requirement should be amended or repealed.

Requiring a credit union or bank to place a notice on the outside of an ATM machine indicating that the user of the machine may be charged a fee is akin to requiring restaurants to post a sign on the outside of the restaurant stating, “if you eat here, you may be charged.”  Consumers deserve notice of the fees they will be charged for service; but this requirement dates to a time when the ability for ATM machines to display this type of message was not universal.  Now that consumers must opt-in to the fees assessed for using the machine (and considering the fact that everyone who has used an ATM in the last twenty years knows that there are fees associated with ATM use), the benefit of the physical placard to consumers is indisputably outweighed by the burden to the operators of the ATMs.  In the case of credit unions, this means the membership is adversely affected by the requirement because the time and resources credit unions spend documenting compliance with this unnecessary requirement are time and resources that are not used to the benefit of the membership.

During the course of preparing this legislation to be considered by the House Financial Services Committee, CUNA and the Leagues met with several Members of Congress and interested parties.  Because of our relationship with the consumer group community, we were asked by the coalition to reach out and attempt to address concerns about the legislation.  We held several conversations with consumer groups, some of which ended up opposing the legislation and others which ultimately did not oppose the bill.  Likewise, we engaged the trial lawyer lobby to seek their perspective and hopefully persuade them to take a neutral position.

Since its introduction, the House version of this bill has been cosponsored by 130 members of the House (78 Republicans and 52 Democrats).  A majority of the House Financial Services Committee has cosponsored the bill, and importantly, a majority of the Democrats on the Financial Services Committee have cosponsored the bill.  The success of the House version of this bill has inspired a Senate version as well.  This bill also has growing bipartisan support.  Currently, 18 Senators have cosponsored the bill (12 Republicans and 6 Democrats).  We expect additional key cosponsors in the coming days.

The outlook for this bill is very good.  While there are no guarantees in this business, we expect the full House of Representatives to take up the bill in July, and Senate consideration could quickly follow.  If the legislation is enacted, it will represent an important victory in our ongoing effort to reduce regulatory burdens for credit unions – and it is could be a preview of things to come:  we have another bill to eliminate duplicative regulation – related to privacy notifications– in the wings.


Coming to GAC? Get Ready to Work

Posted by on Thursday, 15 March, 2012

My phone reminded me this morning that GAC starts tomorrow…and I am reminded that I promised my friends at CUNAverse not just one but two blogs before GAC.  I beg forgiveness… we’ve been a little busy here in Washington.

If you’re coming to town this weekend for the GAC, I want you to know that we’re counting on you to help us bring the member business lending bill across the finish line.  I promise you it won’t be easy – in fact, you’ll probably leave DC quite frustrated – but I know we can move the ball if we put it in your hands.

The Senate is presently considering a bill that is generously being referred to as a jobs bill. In reality what this legislation does is relax a set of investor protections in the hopes that businesses will use the savings they receive from reduced regulatory compliance to hire new workers.  No one has estimated how many jobs this might create.  Yet, the bill passed the House of Representatives with almost 400 votes, and the Senate is poised to act perhaps as soon as next week.

What better time to have 4,000 credit union advocates in Washington, DC?

It is not going to be easy getting the MBL bill included in this “jobs” package.  Even though we have made an indisputable case for raising the MBL cap, we have a number of things working against us.

First, there is a strong desire among Senate Republicans to simply take up the House-passed and pass it as is.  (It did pass with almost 400 votes, afterall).  This means the Democratic leadership will be under pressure to simply move it along.  The faster this bill moves through the Senate, the harder it will be to get attached.

Second, if we were successful in getting the amendment considered, we would need to secure 60 votes for its passage.  This is not an impossible task; but in a world in which many Senators don’t believe the MBL bill will come to a vote, they are sometimes reluctant to show their cards unless they have to.  While we have confidence that we have, if not sixty, close to sixty votes, no one really knows.  Perhaps this is why the Independent Community Bankers of America and the American Bankers Association have recently stepped up their effort to block the MBL bill.  (The ABA ran expensive radio ads on the very popular Washington radio station WTOP).

We have very little ability to affect the first challenge – slowing down the bill.  However, there is a group of Democratic Senators trying to do just that.

The second challenge is completely within our hands.  We can get sixty votes (and more) on this legislation.  We’ve laid the ground work to get there.  Everyone in Washington is talking about Mark Udall and his “quixotic” bid to – gasp – allow credit unions to help small businesses.  But to get there, we need to turn up the pressure.  Many don’t believe there is going to be a vote, but we continue to push.

If your Senator is not with us, it’s time to ask them why not?  If they tell you they aren’t with us because it’s not going to come up for a vote, make sure they don’t have any policy concerns.  When they tell you they have no policy concerns (or after you’ve addressed their concerns), let them know small business owners and credit union members throughout their state expect their vote.

The Udall bill would help create 140,000 new jobs in the first year by allowing credit unions to lend an additional $13 billion to small businesses at no cost to taxpayers… and the only folks blocking this bill are the banks that bailed on small business during the crisis, had to be bailed out by taxpayers, were begged to lend to small businesses, and refused that call.  We can get this done.

The day of reckoning is approaching.  With your help next week, we’ll bring that day closer.


Digging Deeper Into Advocacy

Posted by on Wednesday, 25 January, 2012

Stay tuned for future advocacy posts from Ryan Donovan

In November, I had the opportunity to speak with a small group of credit union executives about what CUNA has been doing in terms of legislative advocacy and political activity.  They asked me to speak with them for about an hour and they wanted me to focus on issues other than member business lending, supplemental capital and interchange.  I relished this opportunity:  The truth of the matter is that, while these issues along with preservation of the tax status are top legislative priorities for CUNA, there are dozens of issues that we work on daily which get much less attention but are no less important.

We talked about our comprehensive efforts on reducing regulatory burden for credit unions, including the work we have done on legislation to make changes to the Consumer Financial Protection Bureau; our efforts to protect credit unions from lawsuits filed by patent trolls and ATM vandals; our efforts to encourage Congress to enact a long term reauthorization of the National Flood Insurance Program; the work we are doing on cyber security legislation; and, of course, the coordinate effort to engage the now-defunct Super Committee in defense of the credit union tax status.

Right before I took questions from the group, I uttered a sentence that immediately lit a light bulb above my head: “Now, if this is the first time you’re hearing about our work on these issues, then we’re not doing a good enough job getting the word out, and that will improve.”  Publishing an advocacy blog on a regular basis is one of the ways that I am committed to improving this.

When I speak to credit union groups, I often tell them that part of my job is explaining credit unions to Congress, but another very important part of my job is explaining Congress to credit unions.  The former is often much easier than the latter, and that’s why I’m starting this blog—to try to explain how what is happening in Washington is relevant to credit unions.

CUNA has a number of communication mechanisms that help those who are interested know what is going on and what we’re working on.  My contributions to CUNAverse will not be a substitute for any of them.  NewsNow is a must-read resource for all sorts of credit union and CUNA news, including a section focused specifically on what is going on in Washington.  The Legislative and Regulatory Affairs Departments both publish weekly updates for CUNA members that discuss the issues percolating in Washington.  If you want to know what is going on and what is CUNA doing about it, these are terrific resources.  For those who want to dig a little deeper on the legislative side, I hope you will find my contributions here valuable.