Credit unions gear up for Election Day

November 3, 2020 5:00 AM

Arguably the most highly anticipated presidential election in decades is finally here, and voter enthusiasm is high.

Early turnout in many states has smashed previous records, and Americans have already cast 70% of total votes recorded in the 2016 election, according to data from the U.S. Elections Project. Research from Gallup shows that voters are more excited to cast their ballot this year than in the last several general elections.

The credit union industry has done its part to help with the democratic process. Institutions have given employees paid time off to vote and encouraged voter engagement. Trade associations have donated money and worked to elect candidates they believe will prioritize the industry’s interests.

However, the divisive nature of this year’s campaign has also caused some credit unions to be cautious in anything they say about politics. And the coronavirus has forced some institutions to pull back from serving as polling places.

Read on for highlights from the Credit Union Journal’s election coverage.

Aaron Passman contributed to this report.

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Putting your money where your mouth is

Every election cycle, political action committees for the credit union industry walk a fine line in their contributions to candidates.

These groups try to support politicians they believe will prioritize issues important to credit unions. But at the same time, they also work to ensure they don’t alienate their own members, who may dislike a candidate for reasons unrelated to the financial services industry.

Overall, the industry provides fairly equal support to both Republican and Democratic candidates to ensure they are never truly without allies in Congress. This year donations to federal candidates and parties from PACs tied to the Credit Union National Association and the National Association of Federally-Insured Credit Unions have skewed slightly Democratic, though that’s likely because the Democrats currently control the House and PACs generally support incumbents.

As of Oct. 23, 57% of industry donations — including money from individuals and PACs — went to Democrats with 43% going to Republicans, according to data from OpenSecrets, a website that provides information on federal campaign contributions run by the Center for Responsive Politics.

“We joke sometimes that this isn’t a business for the faint of heart,” said Trey Hawkins, vice president of political affairs at CUNA, said earlier this year. “The challenge comes in communicating that to folks who may not realize our north star is on credit unions. In terms of decision making, if you keep that as your north star, you are looking out for candidates who will be the best advocate for credit unions.”

Time off to vote

There has been a huge get-out-the-vote push this year, and some credit unions have joined in.

Earlier this year, the Credit Union National Association launched its Credit Unions Vote initiative, a nonpartisan effort aimed at urging members to vote in the election. Some institutions have voter registrars on staff who can help members get signed up to vote.

A number of credit unions, including Baltimore's Securityplus FCU and Democracy FCU in Alexandria, Va., announced Election Day closures in order to allow employees time off to vote.

“The credit union philosophy is all about people helping people,” Ken Cahoon, CEO of the $170 million-asset Democracy, said in a press release in October. “By empowering our employees to exercise their right to vote, we are standing tall in our communities and participating in our country’s most important decision. Giving our employees the time to vote helps to strengthen our country and economy.”

Others in the industry, including Arizona Federal Credit Union in Phoenix and CU Strategic Planning, joined Time To Vote, a nonpartisan effort to increase voter participation. Arizona Federal sent early voting information to workers and allowed employees flexible schedules to get to the polls.

“I think employers need to make some sort of accommodation in order to truly serve their communities — whether that’s giving employees time off, flexible scheduling, encouraging early voting by mail, or a combination thereof,” Jason Paprocki, chief operating officer of the $2.2 billion-asset Arizona Federal, said earlier this year.

But as credit unions and others in the financial services space encourage members to vote, they are also being cautious about coming across as partisan. By focusing on voter engagement, institutions are hoping to sidestep more politically divisive issues and avoid alienating members.

“There are members on both sides of the political aisle and, in our divided nation, you're bound to alienate half of your credit union by picking sides,” said John Hecht, managing director at Artisan Advisors.

Stalled nomination

Presidential elections rarely directly impact credit unions — the industry is much more closely involved with Congress — but this year’s outcome could have a sizable impact on the National Credit Union Administration.

NCUA board member Mark McWatters’ term on the panel expired more than a year ago, though he has pledged to stay on at the agency until a successor is confirmed. President Trump nominated Kyle Hauptman to replace McWatters but his confirmation process has taken longer than expected.

It’s now unclear whether Hauptman will receive full Senate confirmation before Congress adjourns.

If Joe Biden wins the presidency and Hauptman is not confirmed, that would allow the former vice president the opportunity to put his own stamp on the agency relatively quickly. Not only would Biden be likely to place a Democrat in the chairmanship, but appointing a second Democrat to replace McWatters, a Republican, would change the political balance of the board.

Plans thwarted

Michigan Legacy Credit Union in Pontiac had plans to help provide rides so voters could get to the polls on Election Day but that unraveled after a court ruling.

The U.S. Sixth Circuit Court of Appeals ruled in late October that an 1895 state law prevents groups or individuals from paying for transportation to get able-bodied voters to Michigan polling locations.

The $253 million-asset Michigan Legacy had planned on paying for up to $2,500 in Lyft rides for voters. The ride-hailing service would have had a credit card from Michigan Legacy on file to pay for the trips, and no rider information would have been provided back to the institution.

Carma Peters, the credit union's president and CEO, described the court decision as “discouraging.”

“My Pollyanna outlook is I want to believe [the court’s decision wasn’t political] but then you sit there and go, ‘Why would you block something to eliminate that and give everybody the opportunity to vote, regardless of where they’re from?’” she added. “Because that was our intent. It does seem like politics comes into it in a small way, because if someone does not have the ability to get to a polling station, why would you not find a way to do that, no matter who they are or where they are? That’s the fundamental democratic process of the United States.”

No votes here

In the past, a handful of credit unions have served as polling place for their communities during elections but those numbers dwindled this year.

The reasons for not serving as a polling place have varied.

After adding a disaster-recovery room to its headquarters, Altra Credit Union in Onalaska, Wis., no longer has space to allow people to vote. The $1.9 billion-asset institution stopped serving as a polling place in early 2019.

For others, the decision was partly related to the pandemic.

Flasher Community Credit Union in Flasher, N.D., was a drop-off location for ballots during the state’s primaries this year. Voters could leave ballots in its overnight drop box.

But right now the $11 million-asset institution is limiting traffic in its lobbies due to the coronavirus. With a high turnout expected this year, Flasher Community did not have enough space in its building for voters, members and employees to safely socially distance.

Because of that, the polling station was moved to the back of a local café.

“I’m not complaining,” said CEO Darla Schafer.

Absentee ballot assistance

More than 100 credit union and bank locations in Oklahoma served as places where voters could get absentee ballots notarized or identification cards copied as part of a change to state law completed earlier this year because of the coronavirus.

The initiative originally was put into effect for the state’s primary in June but Gov. Kevin Stitt signed an executive order that extended the measures through the Nov. 3 general election.

In the Sooner State, there were 264,000 mail-in absentee ballots cast, a new record, the Oklahoma State Election Board posted on social media on Oct. 31. But it remains unclear if these changes will become permanent once the 2020 election has ended.

“That’s a political decision,” said Nate Webb, executive director of the Oklahoma Credit Union Association. “As you know, when you start getting into political decisions it becomes somewhat hard to predict.”