World CU Conference Coverage: 3 Views From Around Globe On Regulation, Advocacy
BELFAST, Northern Ireland–Credit unions were offered three perspectives and suggested strategies from around the world when it comes to working with regulators and elected officials.
During the World Council of Credit Unions’ World CU Conference here, Martha Durdin, president and CEO of the Canadian CU Association; Mark Degotardi, president and CEO of Customer-Owned Banking Association in Australia, and Jim Nussle, president and CEO of CUNA, offered their views in response to questions posed by panel moderator Brian Branch, the president of the World Council.
Here’s a look at the questions asked and the answers provided:
Branch: We all care about our institutions. But why should regulators care?
Degotardi: Being right is a good start, but being relevant is just as important. You have to ask, what do they care about? And they care about a lot, but what they care about most is the voter. We were able to turn an effort to tax financial institutions into an argument that it was a tax on school kids and working families. I got a call from the Treasury and they said, ‘Can you please stop now’ with the campaign?”
Branch: What about strategies for mobilizing members?
Nussle: This is about voters. The more you can put it in the voice of the voter so politicians understand that, the better off you are. In the U.S. we have 106 million memberships, which to me is probably the largest constituent group out there in the U.S. Our challenge, of course, is communicating and motivating them. I would also add, don’t think of this only in terms of the capitals of our countries. Go to where politicians live. Our advocacy is done at the local level. That’s where the direct communication is done with policymakers.
Branch: How do you connect with government officials?
Durdin: You need to address issues relevant to the government. The current Canadian government is very concerned with payday lenders, and we try to work with the government to see us as an alternative to payday lenders.
Branch: In Canada, you have provincial legislation for the credit unions that is going through an evolution, too? How do you integrate provincial and federal regulation?
Durdin: In Canada we have 10 provinces, each with their own regulatory environment. But the federal government looks at capital rules and money laundering and tax, which trickles down to provincial level. We try to ensure the provinces speak to the regulators with one voice, and it’s difficult, because the regulation is different in each province. We try to work together through working groups. And remember the regulators all talk to one another, as well, so it’s important to have a coordinated approach.
Branch: Mark, you’ve had success in Australia putting together one voice for credit unions, mutual banks, cooperative banks, the friendly societies. How?
Degotardi: It’s a challenge, but we’re lucky in that we have one regulator. About 10 years ago COBA and its predecessors came together—we used to have four industry associations for industries representing about 10% of the market, which seemed like three too many. When I first started the notion of having a single association was just an anathema. But we faced a direct challenge around a specific legislative issue that was the catalyst for asking why aren’t we speaking with one voice? That makes it easier now. I would say that speaking with one voice is easier, but it doesn’t mean you have to have one person speaking. It’s important from our perspective to have many voices. But when you have different voices speaking on different things, all that does is give the regulator a reason not to act. So you have to be careful. What you need isn’t one voice, but one unified message.
Branch: Jim, in the U.S. you have 6,000 CUs, and more than 6,000 voices. What is the strategy to have everyone speaking with one voice?
Nussle: You have to listen. One of the things we have done at CUNA is to be better at listening and responding better. A good way to engage people is to be a good engager. If you come down from the proverbial mountaintop and say, ‘Here are the talking points, use them,’ it won’t work. People want to be involved in developing the agenda and in having a voice. Having diverse opinions and thoughts and perspectives is important.
Branch: What kind of position do you have to be in to have a ‘Don’t Mess With Us’ attitude, and how do you avoid repercussions?
Nussle: I’m a believer that the bankers are already taking us on. I believe if they are going to shoot, let’s get out of the foxhole and get running. I don’t think we have to be disrespectful, we have to have an edge and be persistent. Credit unions are very nice. We are polite. We believe the job we do ought to sell itself. And it doesn’t
Degotardi: At home, we say, ‘If you put your head above the parapet and no one is firing at you, that’s a problem.’ But once you put your head up, you’ve got to be able to move and respond. We say keep your message positive. Saying banks are bad doesn’t work in our agenda. We want a positive and constructive agenda, and we want to be prepared to take the hits. You have to be, as Jim said, consistent. Persistence is critical. You get knocked down, you dust yourself off, and you try again
Durdin: We are starting to engage much more than we used to with third parties that can make our argument on our behalf.
Branch: How are you working with your regulators?
Degotardi: We try to make regulators understand that they don’t just have a responsibility to keep our system safe, they have a responsibility to keep our system competitive.
Branch: Mark, you mentioned the word ‘fair.’ We often hear about a ‘level playing field.’ How do you contest that it’s not fair competition if you have that level regulatory playing field?
Degotardi: In Australia, it’s not fair. But that’s also a distraction. At COBA, what we really are talking about is narrowing the gap between us and the four major banks with 90% of the market. It’s never going to be fair. We need to get over that and move on and try to narrow the gap as much as we can. If we stop thinking constructively about how we can build our marketplace, I think we’re missing the point.
Durdin: The banks used that argument against us, and we lost some tax advantages as a result. The banks argued we had a tax advantage and it wasn’t fair. And we need to counter that by showing we are different, that there should be different tax regimes for cooperatives. Those arguments need to be made with officials.