By Dan O'Brien
This year in Washington was purported to be all about change. Health care. Tax reform. To say it has been an uphill battle would be an understatement. But there is one area of great importance to credit unions where real change can still be realized: regulatory relief.
Since the enactment of the Dodd-Frank Act, the nation has lost more than 1,700 federally insured credit unions. Overregulation has played a big role in the mergers and closures that have reduced credit union numbers in recent years. And while the pace of new rules has slowed somewhat (for now, at least), credit unions still need respite from many of the ones created under the 2010 statute and from some of the restrictions on credit union growth and services long built into existing law.
One of the ways to tackle these challenges is through the advocacy efforts of organizations like NAFCU – and events such as the association's Congressional Caucus – which gets under way Sept. 10 in Washington. But equally important are credit unions' advocacy efforts at home – in the backyards of their elected legislators.
Congress has another year until elections are held, so right now – before everyone gets caught up in the demands of campaign season – is an especially important and convenient time to talk through these issues with your senators and representatives.
Five Tenets
These issues, while numerous, point to the overarching need for a positive regulatory environment that allows credit unions to grow and succeed. To accomplish this, NAFCU has adopted five tenets, including:
- A regulatory environment that allows credit unions to grow
- Appropriate, tailored regulation for credit unions and relief from growing regulatory burdens
- A fair playing field
- Transparency and independent oversight
- A strong, independent National Credit Union Administration (NCUA) as the primary regulator for credit unions.
Regulatory relief is achievable with this current Congress and administration. Credit unions' efforts – conducted during Caucus and in those in-person meetings and events in lawmakers' district and state offices – will be critical to achieve the changes needed to ensure the industry a positive regulatory environment.
Credit unions are the good guys in the consumer financial services space. Credit unions know this, their members agree and even lawmakers and regulators have themselves attested to it in recent years. The industry didn’t participate in the practices that led up to the 2008 financial crisis. Instead, credit unions stepped up their lending to members and their small businesses when they needed it most.
Knocking on Doors & More
While NAFCU lobbyists are daily knocking on the doors of regulators and lawmakers in an effort to keep the industry from getting swept up into new regulations and laws that should not pertain to them, it is important that these same elected and appointed officials hear your stories and how their actions are impacting your institutions and members.
In another year, the election season will be in full swing. In 2018, Senate Democrats have 25 seats up for reelection; Republicans, only nine. But on the House side, Democrats need to win back just 24 seats to overtake the majority. As we've seen in past elections, no sitting lawmaker seeking a new term is assured a win, and the outcomes are hard to predict. What we do know is that members of Congress are eager to please constituents, and the more they hear from the credit union industry, the more likely it is that credit unions can win the kind of relief they need.
Your one-on-one meetings with lawmakers lets them put a face to the institutions and consumers that have been damaged most by overregulation. And when lawmakers hear about the difficulties faced by financial institutions in their own backyards, serving their own constituents, they are going to do what they can to help.
Many credit unions today are thriving in the marketplace because of their day-to-day focus on members, and they're doing that in spite of the ongoing barrage of regulations. That is the story the industry needs to share with policymakers now – and in the many months to come.
Dan O'Brien is NAFCU's Director of Political Affairs.