Credit unions have seen this before. As a new Administration ramps up their team, policy positions, and assessment of the current state of play, uncertainty creeps in about what is coming next. Rightfully so, each Administration wants to put its stamp on areas that are important to credit unions, namely regulatory oversight and tax policy.
None of this is new. These discussions and deliberations have happened time and time again when a new Administration enters. Some have brought more challenges than others. There have been cases of specific lawmakers who were very focused on putting the credit union tax-exemption in the spotlight. That is fine. It doesn’t mean a death knell to the credit union tax exemption. Rather it's our time to take stock of our exemption. It’s our time to tell our story. That story is powerful, diverse, historic, and specific to every credit union that exists today and those that existed in the past.
We all know the background and the basis for why credit unions were created . . . to fill a void that others had left in serving people of modest means in some of the most challenging economic times of our country. But our story goes way beyond our founding days. Since that time, credit unions have served member after member in every corner of this country with high-quality, low-cost financial services that members can trust. Our presence has ensured balance in financial services, offering an alternative to the also much-needed for-profit segment of financial services. Without one or the other, the American consumer would have less choice due to lack of competition and diversity of structures that drive credit unions and our for-profit competitors. This balance works and has made our financial marketplace the strongest in the world. Consumers and small businesses have choices and offerings that no one else does and it’s that competitive landscape that keeps those choices and offerings robust.
As we evaluate the Administration’s moves with leadership at the NCUA and as it looks to put its tax policy in place, it’s time to get busy telling our story to every corner of the country that we have served for more than 100 years. That story will make it clear why we have more than lived up to our tax-exemption and why credit unions need our own regulatory framework and prudential regulator that is different than our for-profit brethren.
This is of course the time that we all hope that our skilled state and national trade associations have laid enough groundwork with our lawmakers, regulators and administration officials to ensure credit unions’ interests will be protected. I am confident that is the case. Credit unions have strongly supported our associations for decades for times just like this. We want our associations to always be proactive representing credit unions, and we expect and deserve a strategic and fierce response if our fundamental structure is called into question. I am very confident they are ready, but make no mistake, they are ready because of all of us, the nation’s credit unions.
It is each of our unique stories that matters to lawmakers. They truly do. Lawmakers respond to hearing about the issues that are going to impact their constituents at home, away from the high drama of the DC landscape. We alone can tell the story of the education-based credit union that offers special products for the unique nature of serving that field of membership. We know what it takes to serve members from all walks of life in large community fields of membership where the local credit unions are the capital provider that makes those communities hum. We know what we’ve done in creating credit union-based organizations that have revolutionized how members can walk into another credit union and get served via shared branching, or how credit unions support each other by helping ensure our fellow credit unions have the loan capacity to serve their members by utilizing loan participations. Both examples demand that credit unions do something that no other segment of financial services does like we do—cooperate. Cooperation is a core principle of being a cooperative and we live that every day, and it does make us different.
We know that we have not failed consumers and small businesses in challenging economic times because the statistics more than show that when those times come, credit union lending outpaces that of others. We know that credit unions have entered low-income communities to be a lifeline for financial services. We know that all our members matter because our structure demands it.
Then there are the individual stories we have all crafted as credit unions. My credit union recently launched a complimentary fraud protection service to help our members against the unfortunate rising tide of scammers. It’s a need the leadership of our credit union saw in the community that is our membership. Other credit unions have recently launched elder abuse prevention programs. Others have created new and innovative mortgage structures to help their members in this time of rising home and borrowing costs. Credit unions have joined forces to offer a lower-cost alternative for financing higher education and trade schools. The stories are truly endless, and they all matter in the world of advocacy. These are the stories our lawmakers will respond to if they are living up to their duty of serving their constituents back home.
As we gear up for any potential advocacy challenge coming our way, let’s all remember that what we do every day to serve 140 million Americans is not ordinary. We are a marvel of cooperation and service. We are a not-for-profit cooperative-based financial system that assists consumers, and small businesses do what they need to do financially.
If you haven’t done it lately, get together with your team, your volunteers, your members . . . and reinforce what your story is and be ready to tell it. Your story is our greatest advocacy tool.
