The presidential election may generate the biggest headlines, but Congressional races are what make the biggest impact on credit unions.
So do credit unions care who gets elected president?
Credit unions focus the bulk of their financial contributions to local candidates—members of the House and Senate, governors, state legislators and the like, since lawmakers who work in proximity to their constituency will likely have a greater impact on credit union operations.
"Credit unions have never played a major role in presidential campaigns, and this year is no exception," Dollar asserted. "The battleground for most credit union issues is in Congress, and that is where most credit union PAC dollars have gone over the years."
That attitude was shared by John McKechnie, senior partner for Total Spectrum and former director of public and congressional affairs at NCUA, as well as a former CUNA official, who concurs that Congress has always been the "main focus" of credit union political activity. But beginning with the 2000 presidential election [between George W. Bush and Al Gore], he said, "we engaged in some pretty aggressive outreach to both presidential candidates on the tax exemption."
As a result, credit unions were able to obtain commitments from the major party candidates to preserve the credit union tax exemption, which, McKechnie adds, was "a very worthwhile exercise" because it put credit unions on the map with presidential campaigns in a way that they never had been before.
Last fall, as part of its "Middle Class 2016" campaign, CUNA launched a website that aimed to inject credit unions into the presidential primaries by focusing on how a strong credit union movement can benefit the middle class. Among other features of the site, users could use the site to tweet directly at candidates from both parties.
Elephants or Donkeys?
Banks have a clear preference for Republican politicians, under the premise that the GOP favors peeling back of financial regulations. But do credit unions have such a preference?
Dennis Dollar, a former NCUA chairman and now a credit union consultant based in Alabama, noted that historically, credit unions have been bipartisan in their support of candidates.
"They [credit unions] do tend to be traditionally more supportive of incumbents that have been favorable to – or at least not unfavorable to – credit union interests, and incumbents are the favorites in most races where they are seeking re-election," Dollar said. "Therefore, when the GOP controls the House and Senate, more credit union PAC money tends to go to the Republicans – just as it tended [to] the other direction when the Democrats controlled the House and Senate. It is a longstanding fact of political life that the campaign money tends to follow the party in power. Credit union PAC contributions certainly tend to follow that trend."
McKechnie said that during his tenure at CUNA, the trade organization was bipartisan "by practice more than design."
"In other words, we worked to cultivate credit union friends on both sides of the aisle in recognition of the fact that credit unions have an appeal that transcends party labels," McKechnie explained. "It followed that credit union political support reflected that broad appeal."
In addition, for most members of Congress, credit unions are an "easy constituency to like" when they frame their issues properly and try to find areas of agreement with candidates, regardless of party, McKechnie noted. "It may be generally easier to talk to Republicans than Democrats when it comes to [regulatory] relief, because Republicans instinctively like smaller government and less regulation," he said. "Conversely, many Democrats find the cooperative, not-for-profit philosophy of credit unions more appealing, and Republicans often gravitate more naturally to smaller banks. The challenge is for credit union advocates is to constantly educate lawmakers about why credit unions are the best option for consumers."
Geoff Bacino, a former NCUA board member and now a partner at Bacino & Associates in Washington, noted that credit unions and their advocates – particularly the PACs associated with CUNA and NAFCU – do not donate to presidential candidates and instead focus on local congressional elections.
"I think you could say that Democrats have a better understanding and awareness of the 'cooperative' nature and principles of credit unions," Bacino said. "But both Republicans and Democrats are on the same page with respect to credit union issues like compliance, regulation and tax exemption."
More Bipartisan than Most
Indeed, Bacino noted that when Democrat Hillary Clinton recently called to "streamline regulation and cut red tape" for credit unions, it was the first time in a long time that a major presidential candidate even mentioned credit unions in their campaigns.
Bacino, a Democrat who was appointed to the NCUA board by former President Bill Clinton, also noted that while lobbying and political contributions have gotten a "bad name" in some circles, they are generally designed to create awareness of certain issues in the mind of political candidates, not as a device to control and dictate their future legislation.
Moreover, credit unions are unusually bipartisan when compared to most other industries.
"I have found, from my experience, that credit unions have more industry leaders on both sides of the aisle than many other industries and organizations that are primarily Republican or primarily Democrat," Dollar explained. "That has generally served credit unions well, regardless of which party is in power in the Congress, there are always going to be some credit union friends in that party willing to help the industry – at least with the big issues like taxation and fighting off CRA [Community Re-investment Act]."
And this bipartisanship paid off "big time" during the efforts to pass HR 1151 [the Credit Union Membership Access Act] in 1998, McKechnie added.
"Credit unions didn't succeed because we did such a good job lobbying Congress during the two years it took to get that legislation enacted," he explained. "Credit unions succeeded because they and the [state credit union] leagues cultivated support from a bipartisan cast of lawmakers in the years before we had a field of membership problem that needed fixing. Political efforts back home were designed to turn into legislative results on Capitol Hill; credit unions should never forget that essential 'hand in glove' aspect of advocacy."
