The bank vs. credit union bickering on Capitol Hill has landed both parties on the Congressional naughty list, and could result in both parties leaving Washington this year with nothing but lumps of coal in their legislative stockings.

First, the banking lobby saw its Transaction Account Guarantee legislation fall out of favor last week.

Then, this week the other shoe dropped on credit unions: CUNA confirmed that it told leaders of its affiliated leagues Tuesday that S. 2231, the bill that would raise the member business lending cap, doesn't have enough votes to pass on the Senate floor. That's an about face from CUNA's former position that S. 2231 does have the 60 votes required to pass the Senate, an assertion the trade association has made for months and as recently as Nov. 28 when 500 industry supporters gathered in Washington to hike Capitol Hill to push for a vote during the lame duck session.

CUNA spokesman Pat Keefe told Credit Union Times on Wednesday that while MBL legislation could still be included in a legislation package, “as a standalone bill it probably wouldn't make the grade.”

What caused the turn of fortune? Keefe said no members of Congress want to be put in a position to vote against the banking lobby, the same reason the trade had given to explain the lack of a vote prior to the November elections, despite a promise from Senate Majority Leader Harry Reid (D-Nev.) nearly one year ago that it would. Not only would the bill likely fail to win enough votes in the Senate, Keefe also said contacts on the House side have said they would prefer to see the bill as part of a package.

Tired of playing nice with bankers and reaching across the profit aisle in an attempt to craft an MBL-TAG package, CUNA rescinded its support of TAG late Monday and fired off a letter to Reid and Senate Minority Leader Mitch McConnell (R-Ky.) communicating that opposition.

In the letter, CUNA President/CEO Bill Cheney wrote that Congress should allow TAG to expire because it is no longer necessary, it is risky and it has not proven to enhance bank business lending. Cheney countered that if Congress wants to enhance and expand access to credit for small businesses, it should pursue raising the MBL cap instead.

“We felt from what we were hearing on the Hill, the best path for us is to let (bankers) know we're not fooling around,” Keefe said of the sharp change in position.

So, if CUNA no longer fancies TAG, what other bills are available to tango on the MBL dance card? That's a good question, Keefe said.

While he said TAG is “not quite over yet,” the CUNA spokesman also hinted that without a legislative partner, MBL may be dead in the water this year. If S. 2231 were to lose on the Senate floor, it would prevent the bill from being introduced again in the next few years, Keefe said.

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