LOS ANGELES—Legislation strongly backed by credit unions isn’t nearly as close to passing Congress as many would like to believe, according to one member of the U.S. House.
In sobering remarks offered by Rep. Brad Sherman (D-CA) at a California and Nevada league session here, credit unions were told that even with new elections looming, bills strongly endorsed by credit unions and their associations are languishing.
“The discussion (heard) here is about just getting the football into the endzone,” said Sherman. “ I don’t’ think you’re even in the Red Zone. Having good arguments doesn’t mean the ball is on the three-yard line.”
Not only is Congress gridlocked, credit unions are competing with some powerful interests,” said Sherman. “You’re up against the banks; people who are able to come knocking and ask for $700 billion. Just because something is good policy, it doesn’t mean it’s going to pass.”
Sherman’s remarks came during a discussion about supplemental capital, which, along with legislation that would raise the member business lending cap, are two of credit unions’ strongest priorities in Congress. But MBL relief has been a credit union priority for more than a dozen years, with little progress to show for it. Sherman, who is one of credit unions’ strongest supporters in Congress, said for the bills to have a chance of passage credit unions need to be able to link the two.
“The reason they are connected is there are two things this country needs: well-capitalized financial institutions, and small business expansion. If you tie those two together I think you’ll have a strong argument. This allows you to go to Congress and say this is about whether that small business gets a loan, or doesn’t get the loan.”
But Sherman, who for 18 years has represented the San Fernando Valley, said credit unions’ best bet may be working with NCUA to find ways to get relief.
“It is very hard to pass legislation,” he said. “There is tremendous power vested in the regulators. One of the functions of Congress now is to influence the regulators in one of two ways: Either push them to do or not do something. Or, give them the air cover they need to do something they do want to do.”
Congress 'Sets the Stage'
Sherman was one of 150 members of Congress who signed a letter earlier this year urging NCUA to rethink it’s risk-based capital plan. “It’s another illustration of the way things happen in today’s Washington, where the regulators have the power and Congress sets the stage.”
Sherman urged credit unions to join forces with the National Federation of Independent Business to lobby Congress on the bills.
During his remarks, Sherman also shared that Rep. Frank Lucas (R-OK), who serves on the House Committee on Financial Services with Sherman, may challenge Rep. Jeb Hensarling (R-TX) for the chairmanship of that committee.