WASHINGTON–Credit unions have seen more progress on favored legislation in this Congress than in any previous Congress, according to NAFCU’s Dan Berger—but all that could roll back to the starting line yet again following November’s elections.
Separately, while it may seem an like opportunity to kick a huge opponent while it’s down, Berger urged credit unions to not focus on Wells Fargo in any meetings with Congress, but to instead focus on why the credit union culture is about doing the right thing.
In remarks to NAFCU’s Congressional Caucus, Berger, NAFCU’s CEO, projected that whomever wins the presidential election, that party will also win the Senate. He said Republicans will maintain control of the House, but the GOP will also lose some seats.
Here’s what Berger had to say about a number of political and Washington-related issues:
The ICBA Lawsuit Against NCUA Over Its Small Business Lending Rule:
“The ICBA lawsuit is a shot across the bow,” said Berger. “It was filed over the business lending rule, but we think it’s really about field of membership. We think the NCUA has a great case and is going to win this, but this is the community bankers’ political strategy, not a legal strategy.”
The Wells Fargo Unauthorized Account Scandal
“This is why I’m so proud to work for the credit union industry,” said Berger. “This is not what credit unions do. This is a culture problem. This is a greed problem. This is a trying-to-hit-the-quarterly-numbers-for-Wall-Street problem. What I really want you to do is go back to your institutions and talk about your culture and doing the right things for members so we never have a problem like this.
“You have to work really, really hard to have 5,300 (former employees) do that,” said Berger.” It’s not just employees. There’s management involved, and it’s a culture problem. People are going to ask you about this on Capitol Hill. Don’t beat up on Wells. Talk about your stories, instead. Talk about what you’re doing to benefit your members and community. Talk about your culture, about being member-centric. This is just the beginning. I predict they are going to find additional things once they start investigating even further. But don’t talk about Wells. Talk about how you refinanced a mortgage for a member. Tell the story. That’s what they want to hear.”
Credit Unions As An Industry.
“We’ve got good news. We’re in a wonderful time right now,” said Berger. “You’re taking business away from people who are not taking care of their consumers. Talk about that on Capitol Hill. Talk about the product and services members want and, more importantly, need. You have trust? What’s in your wallet? You can’t buy that trust. Membership is up because credit unions are recognizing the good deeds you do.”
Small Business Loans
Berger urged credit unions to show members of Congress who might raise issue of the tax exemption a chart or slide showing credit unions vs. banks in terms of providing capital to small business, including the cutback in lending by banks during recession. Berger also showed a slide showing all of the settlements the big banks have paid for various transgressions with various regulators.
Berger fielded the following questions from the audience during his remarks:
Q: What is Relationship with Treasury and how can Treasury affect our industry?
Berger: We meet with Treasury officials once or twice a month. But you have to realize they are in their own little world in terms of what they want to accomplish. Sometimes they can have a tremendous impact on our industry, especially when they publish various white papers, such as on the 1% deposit. So we have to get in and talk to all the administrators at Treasury. That’s what it’s about; ongoing relationships, not just with Treasury but also with SBA, NCUA, CFPB. You have to be at that all the time. They have a lot of turnover?
Q: Have there been any changes in atmosphere at NCUA since former chairman Debbie Matz has left?
Berger: Chairman (Rick) Metsger has been doing a really good job providing leadership at the NCUA and he really wants to make some changes, and board member McWatters has always wanted to provide reg relief. We have found them to be very open to doing some things for us, but everything takes time, whether it’s the FOM or MBL proposal. There has been a little easier environment to work in. The leadership has been stellar at this point from both board members.
Q: What about Wells Fargo and any backlash at CFPB?
Berger: Yes, there has been backlash. We were making some progress there, and now you have people who are very pro-CFPB saying, ‘This is why we need to have the CFPB.’ So there is going to be a lot of back and forth. It’s going to be nearly impossible to do anything in this Congress because of it. It’s going to slow everything down.
Q: What About Hillary Clinton and Donald Trump and credit unions?
Berger: Secretary Clinton has been great to us. We had a great relationship with her when she was Senator in New York. We met with the senior campaign and policy folks with both Clinton and Trump campaigns and urged them to mention credit unions and community banks. Donald Trump has not done that, but he has had a lot of rhetoric against big banks and Wall Street. But Secretary Clinton has specifically mentioned credit unions and community banks. We don’t endorse at NAFCU presidential campaigns, but we meet with them on an ongoing basis.