WASHINGTON (3/26/12)--In an article that calls credit unions and the Credit Union National Association (CUNA), and community banks, two of the "most quietly influential" Washington, D.C. advocacy groups, The Huffington Post examined the political conflicts between credit unions and community banks.
While some in the general public imagine that Washington that is being run by Wall Street banks, retiring Rep. Barney Frank (D-Mass.) told the Post, "the big banks aren't the most potent lobbyists, because everybody hates them.
"It's the credit unions and the community banks because of their grassroots networks," he added. Frank is the ranking minority member on the House Financial Services Committee.
The story goes on to describe the climate as CUNA works for legislation to increase the credit union member business lending (MBL) cap and the Independent Community Bankers Association (ICBA) works for a bill drafters called the Communities First Act (H.R. 1697).
The article noted a request by House Financial Services Committee Chairman Spencer Bachus (R-Ala.) for the two bodies, CUNA and the ICBA, to meet and discuss the pending bills--in an effort to move things forward. CUNA agreed to the meeting. ICBA did at first, but the bankers then balked and refused to attend. The bankers' move was likened to "cussing out the boss at an office Christmas party."
CUNA Senior Vice President of Legislative Affairs Ryan Donovan was quoted in the article as noting the "very visceral reaction" of the community bankers in this and other cases. "The ICBA would rather have their entire legislative agenda burned than let our small bill pass," he said.
Legislation that would increase the credit union MBL cap from 12.25% to 27.5% of assets remains active in both the House and Senate. CUNA estimates the MBL bill would inject $13 billion into the economy, creating as many as 140,000 new jobs.
The ICBA told The Huffington Post that it will "fight [the MBL legislation] to the death," but the story noted "banks have little to lose from the credit union bill, and large potential profits to gain from their own legislation."
The community bank bill would loosen some community-bank related regulations. The article recalled that Georgetown University Law Professor Adam Levitin in a November hearing called this bill "narrow, special-interest pleading" that "does nothing for communities."
Mark Wolff, CUNA senior vice president of communications, said a misunderstanding of credit unions' nonprofit business model by bankers contributes to the conflict, and Bethpage FCU Senior Vice President Linda Armyn said that the banker objections to credit union growth are "silly.
"If you look at the marketplace, the banks have 95% of the market share. There isn't a whole lot of data that supports we're taking their business," she told the Post. "We all just want to move forward and grow," she added.