In November, the NCUA unveiled its ambitious and forward-looking proposal to update regulations governing FOM. The legal issues involved are complex, because they have to be, and will require credit unions to make nuanced arguments in defense of the need to modernize a 20th Century rule for use in a 21st Century marketplace.

Predictably, bank countermoves began the day before the draft rule was even voted on by the NCUA board. The American Bankers Association sent a curt warning to the NCUA against FOM changes that exceed what the ABA believes is provided for by the Federal Credit Union Act. Describing the yet-unseen rewrite as “gutting” membership parameters, the bank trade group promised that reform would be “vigorously opposed.”

Not to be outdone by the ABA, several state-based bank trade groups voiced strong opposition to members of Congress the day after the NCUA issued the proposal. One Senate Banking Committee staffer described a phone call from a bank lobbyist as “off-the-charts angry, frothing at the mouth.”

I'm sure it was.

This reaction underscores a political reality that cuts against credit unions in the FOM debate. In contrast to the detailed, policy-based arguments called for on the credit union side, bank rhetoric boils down to “just say no.” Bankers have the luxury of simply alleging that the NCUA has gone beyond statutory authority in crafting the FOM proposal, without any further proof. Based on early soundings from Capitol Hill, that soundbite seems to be resonating to a degree. Fair or not, visceral, loudly-stated arguments often work.

The FOM comment period ends Feb. 8, and it presents credit unions with a real opportunity to influence the deliberations. Banks figure to repeat their earlier form-letter formula. Credit unions need to go one better: Of course they should weigh in with numbers, but they also should offer input that reflects the day-to-day realities of how the common bond actually works. Give real world examples of why “community” means something different in a financial services context than it did 20 years ago, and why evolving technologies and workplaces call for an evolved rule.

Credit unions should never apologize for trying to serve people, and the FOM issue provides a perfect forum to exhort the NCUA to be flexible and creative in helping credit unions realize their tremendous potential for the consumer.

During World War II, Soviet Field Marshal Georgy Zhukov was quoted as saying that “quantity has a quality of its own.” Although I'm not usually in the business of taking my political cues from the Red Army, the Marshal had a point when it comes to the NCUA comment process. Credit unions have to make a statement, with sheer numbers of letters, as well as letters that make strong policy cases based on the unique perspectives that can only come from the credit union C-suites and board rooms.

There, the banks can't match credit unions. By making member-focused arguments for expanded consumer choices, credit unions can emerge from this battle with new and improved real-world FOM rules of the road.

Based on what I see and hear on Capitol Hill, banker grassroots have improved over the last decade, in direct proportion to their intense dislike of credit unions. Do I think they are better at grassroots politics than credit unions? No. But credit unions underestimate banker vehemence at their own peril.

A banker recently made an interesting revelation to me. He said the bank lobby has “a very simple strategy: Make credit unions play 'Mother May I' on every issue. We think we can convince Congress the credit union agenda should be subject to banker approval.”

Leaving aside revulsion at the arrogance of the statement, my own view is that the only way their strategy succeeds is if credit unions allow it. The MBL and FOM rulemakings are a ready opportunity to make sure that credit unions, and not bankers, determine our future.

John J. McKechnie, III is partner for Total Spectrum. He can be reached at 202-544-9601 or [email protected].