Graham Advises Credit Unions Not to Overstretch Commercial Boundaries; Optimistic on Bankruptcy

WASHINGTON-During the South Carolina Credit Union League’s Hike the Hill last week as part of CUNA’s National Hike the Hill month, the group had the opportunity to discuss two key issues for credit unions-taxation and bankruptcy reform-with Senate Judiciary Committee Member Lindsey Graham (R-S.C.). Graham gave a qualified response to the taxation issue. He said he has told the bankers “They have zero chance of doing away with the credit union tax exempt status.” But, he said, credit unions need to remain mindful of their original mission and keep commercial lending in check. He warned his home state credit unions not to get too greedy, something he referred to from his days as a divorce attorney as the `hog rule.’ Graham agreed to help credit unions determine where to draw the line. “What you do is not the number of people you serve,” he said of banker claims that credit unions cease being credit unions at a certain size. As a member of the Judiciary Committee, Graham said, “[Bankruptcy reform] is my number one priority in terms of financial services.” He added that “comprehensive reform,” not “piecemeal” is what is necessary. CUNA Vice President of Legislative Affairs and Senior Legislative Counsel Gary Kohn noted that House Financial Services Committee Chairman Mike Oxley (R-Ohio) has expressed interest in moving the netting provisions separately, which could then start a slippery slope to carving out Chapter 12 and weaken the bill’s chances. Graham said it is unlikely for bankruptcy reform to pass before the end of the regular congressional session, but he is confident that the new Congress will yield a few more Republicans in the Senate and help the bill pass. [email protected]