5 credit union takeaways from the State of the Union
by. Henry Meier
We’ve come a long way and not for the better since Barak Obama electrified the nation with his speech before the Democratic National Convention proclaiming the need for politicians to unify the nation. Last night, now President Barak Obama, who taught constitutional law at the University of Chicago, put forward a mix of proposals emphasizing his ability to act unilaterally in furtherance of his goals with or without the help of Congress.
However, even though the President can make headlines by relying on initiatives to better coordinate activities with state government and can push the envelope of regulatory rulemaking authority, in the end there is very little he can do to fundamentally change the nation’s public policy without Congress. The result is that we can expect another year that will once again feature gridlock and limited opportunities for credit unions to advance their objectives. But this isn’t all bad. Here’s what we can take away from last night’s State of the Union Address.
1) There is no chance of the type of grand bargain tax and budget reform that would endanger the credit unions’ tax-exempt status. The only mention of tax reform made by the President was of changing the tax code to make it more attractive for companies to bring foreign investments back home to U.S. Government coffers. Don’t get me wrong, of course credit unions have to be on the lookout for efforts to eliminate our tax exemption. But there is nothing about the current political dynamics in Washington indicating that this concern should crowd out other legislative priorities.
2) Patent reform might be the area where credit unions have the best chance of getting movement on an important legislative priority. The President mentioned patent reform relatively early in his address and the polite applause it receives indicates that there may be bi-partisan support for legislation in this area.
3) Are we going to see reform of Fannie and Freddie this year? Who knows? In his speech, the President said that “since the most important investment many families make is their home,” Congress should send him “legislation that protects tax payers from footing a bill for a housing crisis ever again and keeps the dream of home ownership alive for future generations.” This incredibly vague passage is the only reference to the banking crisis and continuing need for financial reform. The passage is noteworthy because the President seems to be acknowledging that not enough had been done to keep Americans from having to bail out banks in the future. For many of us, this is fairly obvious, but for years both the President and Congress have argued that Dodd-Frank put an end to too big to fail banks.
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