From The Desk Of ... MCUL President/CEO David Adams
Dialogue with Lawmakers Vitalin Challenging New Year
Credit unions, as not-for-profit cooperatives, are the beacon of hope for consumers and small businesses negatively affected by the economic-driven contractions in the credit markets. At a time when credit unions want to lend more and take more risks,regulators are clamping down and lawmakers are more focused on consumer protection than shielding and strengthening our financial system.
Because of this, credit unions are facing a number of legislative and regulatory challenges in 2010. Among these are overdraft fee legislation, card interchange fee restrictions, the extension of the Community Reinvestment Act to credit unions, the creation of a new Consumer Finance Protection Agency that would add additional examination costs, and mortgage cramdown legislation. These issues, when combined with the increased regulatory costs associated with rising deposit insurance premiums and other regulatory challenges, are causing many credit unions to have a tough time keeping their heads above water.
It is time for us, the consumer-focused sector of the huge, $60 trillion financial services industry, to raise our voices and call for balance and reasonable approaches to legislating and regulating on behalf of the consumer. Unlike past lobbying challenges, our greatest problem will not be the dissent from our competitors, the for-profit banks. This time, our greatest challenge will be a pro-consumer/anti-bank movement that threatens to sweep credit unions into many reforms that will make their operating environment more challenging.
Our grassroots activism has never been more important. Tell your lawmakers your individual story. Tell them you are trying to lend more and help the economy and your members, but that with restrictions on legitimate sources of fee income like card interchange and overdraft fees, you will need to charge fees elsewhere. Help them understand that you can only raise capital from earnings, and that if you are to grow your deposits and loans in an economy when credit is badly needed by consumers, you need to have earnings.
Our new NCUA Chairman Debbie Matz and the rest of the board members also need to hear from credit unions on the new proposed corporate credit union regulations as well as other issues like alternative capital. The NCUA should be encouraged to advocate for us on some of these big issues.
With active involvement from our credit union community for Washington, D.C. fly-ins and other activities like PAC fundraising, letter writing and in-district meetings, we will prevail in avoiding many of these very harmful legislative and regulatory consequences. Along the way, we may also succeed in getting some reforms like the lifting of restrictions on small business lending. With a strong grassroots lobbying presence and individual credit union letters and e-mails, federal lawmakers will listen.
Thanks for your input and support as we address these challenges and opportunities together.
Michigan Credit Union League