Though no one is suggesting that credit unions jump into the partisan fray, a new era of advocacy may be upon us. The days when credit unions could afford to lay low on political issues - and remain unknown to their legislators - are long gone.
With GAC just around the corner, THINK caught up with John Magill, CUNA’s senior vice president of legislative affairs, for his take on the new political environment and why it’s more important than ever for credit unions to make their voices heard.
THINK: Credit unions have been through a rough couple of years on the legislative and regulatory fronts. This was not business as usual, was it?
MAGILL: No, absolutely not. With the Obama administration and the 111th Congress (2009-11) we saw a more pro-consumer orientation. It’s not that credit unions aren’t pro-consumer – we represent 93 million consumers who are credit union members – but there’s been a greater emphasis on regulation and we’ve been swept up in that process. As a result, we’ve had to work to make our positions known.
THINK: You’re speaking in the past tense. Does that mean the outlook will improve for the credit union industry? Can we relax now?
MAGILL: I think with the 112th Congress (2011-13) we’ll see the pendulum swing back toward deregulation and a more pro-business stance. But that doesn’t mean we have nothing to worry about. While we might not be facing the issues we’ve been battling for the past few years, one of our main concerns has been our tax exemption. I don’t see a straight up-or-down vote on our tax exemption happening. But I’m worried about a scenario where, at the 11th hour, when they’re trying to put together a budget and reduce the deﬁcit, the $1.5 billion a year from our tax exemptions is going to be somebody’s potential target. Bankers will be leading this charge, make no mistake about it.
THINK: As credit union leaders, how do we make ourselves heard?
MAGILL: Our strength is in our grassroots. Our CEOs, our volunteers and members, our leagues—they all play an important role in getting our voice heard in Washington. Prior to my work here at CUNA, I spent 30 years on Capitol Hill. My last position was chief of staff for Rep. Wally Herger (R-Calif.). What that experience taught me is that people on the Hill respond to constituents who take an interest.
I know a lot of credit union leaders are looking forward to doing Capitol Hill visits during GAC. By all means, they should do that. But at the same time, I know from experience that members and their staffs have 80
things flying in their faces at all times when they’re in Washington. It’s very difficult to get their undivided attention or more than five or 10 minutes of their time.
But district office visits are different, and we should make the most of them. When members of Congress are back in their districts, they have more time to spend. A CEO can call or write to invite their legislator to come out and see what you do. That’s a great opening for explaining what a credit union is, why we’re not-for-proﬁt and how we benefit our members.
I’d also remind people that a full one-third of the new Congress is comprised of freshmen. That’s an extraordinary opportunity to make yourself known.
THINK: What about educating members? Is that an important role for credit unions to play?
MAGILL: It certainly is, because the average person isn’t up to speed on the challenges we’re facing. I may work for the credit union cause now, but when I worked on Capitol Hill I didn’t always know what the credit union difference was or why that difference was important. You should not assume that your members of Congress know either.
THINK: Is there a risk of offending people when you talk about politics?
MAGILL: There is, but I’m in no way recommending that credit unions take a partisan approach or go on the attack. That isn’t productive. On the other hand, if we don’t take the time to explain to members why, for example, our tax exemption is important, they won’t understand. And they may hear negative information from other sources. Educating your members on these issues can also help them appreciate their credit union. And maybe get them more involved.
THINK: What are you expecting in the year to come? Will 2011 be a good year for the credit union cause?
MAGILL: In a strange way, the logjam everyone is expecting (with a divided government) may open an opportunity for credit unions. When you can’t pass the headline grabbing stuff like immigration reform or the budget (without triggering a veto), you might be more interested in passing legislation that isn’t polarizing or high profile. Credit unions aren’t spotlighted as controversial, so this might be a great time to pass something like capital reform or MBL (Member Business Lending). We certainly have our work ahead of us, but we’re ready.