Our Lead Story:

Crunch Time on Member Business Lending 

By David Adams
In this month’s Priority Report, I want to focus on legislative advocacy, the league’s primary purpose. Specifically, I’ll focus on the important member business lending legislation that would raise credit unions’ statutory MBL cap from 12.25 percent of assets to 27.5 percent, allowing for much more long-term capacity to make member business loans.

First, I want to thank our Michigan credit union community for all that you do to assist with legislative advocacy. My staff and I recently returned from Washington and the CUNA GAC. We had 130 Michiganders there joining a total of 4,000 credit union leaders from across the country.

While there, Rep. Bill Huizenga, R-Zeeland, signed onto the MBL bill, joining eight of his 15 Michigan colleagues in the U.S. House. His co-sponsorship is all the more significant because Rep. Huizenga is one of three Michigan delegation members who serve on the House Financial Services Committee. All three of our committee members are now co-sponsors. We also secured additional co-sponsors on the supplemental capital legislation and had many great conversations with lawmakers and staff on our issues. We’re making progress on all fronts.

But remember, playing defense is always easier than playing good offense. We’ve been very successful preserving our tax-exempt status and minimizing the effects of the Dodd-Frank legislation on credit unions. We’ve even been successful getting a carve-out on the debit interchange restrictions for credit unions. But now, it will take an act of Congress, so-to-speak, to raise our MBL cap.

So, CUNA and state leagues are now calling on our credit union community to pull out all the stops to shore up and gain additional support for our MBL legislation.

Here is where we stand. Senator Majority Leader Harry Reid has said that there will be a vote on S. 2231, the Senate version of our MBL legislation. That vote will likely come sometime after the Senate returns from break on April 16. It is safe to say, that with the need to have at least 60 of 100 senators’ votes, we still have a battle ahead of us. Yes, Michigan Sens. Debbie Stabenow and Carl Levin are strong co-sponsors and I am confident that they will support the bill. But senators from other states aren’t quite there yet. Still, we are getting close.

So, what must you do to help get this legislation passed?

First, we need all credit union leaders to activate everyone within their sphere of influence to contact Sens. Stabenow and Levin to thank them for their support and to encourage their affirmative vote for S. 2231, the Credit Union Small Business Jobs Bill. This can be done very easily by visiting the MCUL’s Grassroots Action Center on our website. Using CapWiz, it is very easy to send an email to the Senators. They need to hear very loud and strong how important this issue is and how much we appreciate their support. No vote should be taken for granted when you consider how actively the bankers are lobbying against us.

Second, that same passion needs to be directed to senators representing other states if your credit union has even one member outside of Michigan. Your employees, directors and management staff should all be contacting these out-of-state senators to encourage their support for S. 2231.

Third, you should educate yourself regarding the position of your congressman on our MBL legislation. Nine of our 15 House members are signed on as co-sponsors of the House version of the bill, H. 1418. Only Congressmen David Camp, R-Midland; Dan Benishek, R-Iron Mountain; Tim Walberg, R-Tipton; Justin Amash, R-Cascade Township; Mike Rogers, R-Brighton, and John Dingell, D-Dearborn, have yet to sign on. So, likewise, if you have members in any of these districts, contact these lawmakers to urge their support for the House legislation. Ask them to sign on as a co-sponsor and to support the bill when it comes to them. For congressmen who have already signed on, contact them to thank them as well.

Finally, your credit union should look for opportunities to get your small business members and other small business leaders who you know, to get involved in this fight. Get creative and send letters to the editor of your local newspaper, put up lobby displays to urge your members’ involvement on this issue, and come up with other creative ways to get the small business community and your membership and your staff totally energized in support of this legislation.

Consider this: Even if we lose this legislative battle, your credit union and the entire credit union community looks so good to the public when you’re fighting for an issue like expanded business capital. We really can’t lose on this issue from a public relations standpoint. We don’t intend to lose on the issue legislatively either.

The MCUL & Affiliates is blessed with strong financial resources, effective political action funds and an incredible grassroots lobbying team. Now is the time to put that to effective use on behalf of the entire credit union community. As an example of that, I recently obtained support from our CURE Trustees for a $100,000 contribution to CUNA to assist with the necessary advertising in other states associated with getting MBL support from other senators. CURE stands for Credit Union Reactionary Effort. It is funded by contributions from CUcorp, MCUL’s wholly owned subsidiary. We are using these resources because we are fortunate to have them. We are directing them to this legislative effort because the stakes are so high.

Again, don’t look at this as purely a business lending issue: it isn’t. This is an important, precedent-setting legislative battle that we must win. It will position our industry for the future and it will build on political capital that we will need in order to take on other legislative challenges and opportunities in the future.

Whether or not your credit union currently makes small business loans, we need your active support now on this important action call. Please visit our website to get more information in our Operation Grassroots Action Center.

The month of April will be critical for getting the MBL legislation passed in the Senate. Then, we will focus on the House of Representatives where a victory in the Senate will be a game changer for generating even stronger support. We already have the Obama administration on our side, so our prospects for victory are good if we rise to the challenge in attaining victory in the Senate in the first round.

Thank you for your support.

View the “Michigan Priority Report” on CUBE TV for a video summary of MCUL & Affiliates CEO David Adams’ April Priority Report introduction.