Credit Union Lobbying Intensifies as House Returns
Bankers take aim at CU tax exemption ahead of NAFCU’s Congressional Caucus.
With the House back in session this week, lobbying on issues of concern to the credit union community will intensify.
And in some cases, the credit union industry will be aligned with banking trade groups, while in others, they will be at loggerheads.
The NAFCU Congressional Caucus kicks off Monday, with a wide array of speakers scheduled to address the conference each morning. CUNA President/CEO Jim Nussle will attend and speak as part of the CUNA-NAFCU effort to encourage credit union officials to vote in favor of the merger of the two groups.
Each afternoon, conference attendees are being encouraged to meet with members of Congress from their home districts and to express their views on credit union-related concerns.
At the top of the list might be credit card interchange fees.
The financial services industry has been fighting against legislation that would require the Federal Reserve to issue rules that would ensure that large credit unions and banks that currently use the four-party card processing system be required to use at least one affiliated network in addition to Visa and Mastercard.
“It would essentially be a back-door price control on your credit card interchange,” NAFCU said, in material provided to conference attendees. “While the bill seeks to limit these new requirements to only institutions over $100 billion, the history of the failed exemption in the Durbin amendment has shown that market changes will negatively impact all institutions.”
The trade group also highlighted, among other issues, its opposition to a CFPB proposal that would cut credit card late fees to $8.
Also, this month, more than half of the state credit union leagues will visit the nation’s capital to lobby on industry issues, according to Jason Stverak, CUNA’s deputy chief advocacy officer.
ICBA Calls for Review of Tax Exemption
At the same time, the Independent Community Bankers of America (ICBA) is renewing its call for policymakers to review the income tax exemption provided to credit unions.
ICBA members have been encouraged to send messages to members of Congress expressing alarm following a flurry of deals in which credit unions have purchased banks. The trade group is asking congressional committees to hold hearings on that trend and has also called for a Government Accountability Office study on the evolution of the credit union industry and NCUA supervision.
“The surge in credit unions leveraging their taxpayer subsidies to acquire local community banks has devastating implications for local communities that go well beyond their expansion of the federal tax exemption for more than $2 trillion in credit union assets,” ICBA President/CEO Rebeca Romero Rainey said.
“With the nation’s community banks accounting for roughly 60% of U.S. small-business loans to local entrepreneurs and 80% of agriculture loans to local family farms and agricultural enterprises,” she continued, “each credit union acquisition displaces a critical and trusted provider of credit, further consolidates the banking industry, and increases the portion of the industry exempt from Community Reinvestment Act oversight.”
Romero Rainey also suggested that Congress consider imposing an “exit fee” on these deals in an effort to capture the value of the tax revenue lost once the deals are finalized.