Uh-Oh, Banker Arguments Are Gaining Traction on Capitol Hill

Don’t look now, but the anti-credit union campaign by the Independent Community Bankers of America may be gaining some traction.

At first, news of the campaign seemed like your typical back-and-forth between the bankers and credit unions.

But when members of Congress start repeating the ICBA’s talking points – as they are now – it might be time to take the bankers’ efforts very seriously.

“It is long past time for policymakers to wake up to the new realities of the credit union industry and subject it to the same level of scrutiny for the sake of our nation’s consumers and economic well-being,” the ICBA contended in its “Wake Up” campaign. “This is not the time to press snooze.”

The trade group has papered Capitol Hill with a study about the evils of credit unions, provided bankers with a customizable op-ed they can send to local media, and on Halloween, distributed cards and candy to congressional offices.

The arguments are familiar.

“Community banks maintain credit unions have outgrown the original mandate underlying their tax exemption, suggesting lawmakers should either ensure they operate in a manner consistent with the mission for which they were originally conceived, or concede their tax subsidy altogether,” the ICBA said in its “white paper.”

And credit unions have returned with their familiar arguments.

“The only mission abandoned by anyone in the financial services industry has been by banks – including community banks – who have chosen to put profit over people when they should have prioritized giving their customers good, honest service,” NAFCU President/CEO B. Dan Berger said as the ICBA announced its campaign.

Among other things, bankers have been waiving a red flag about credit unions purchasing community banks.

It’s easy to write off such efforts as more of the same.

But now, some members of Congress are raising the very issues the ICBA has been touting.

Take Rep. Blaine Luetkemeyer (R-Mo.).

During a recent hearing with banking regulators and then a subsequent session with Treasury Secretary Steven Mnuchin, Luetkemeyer said some folks (who exactly those folks are, he didn’t say) are starting to question whether credit unions are purchasing banks and, in the process, evading taxes.

Luetkemeyer cited the number of bank purchases by credit unions as a troubling trend.

It might be easy to write Luetkemeyer off. After all, his party is in the minority. And his family has owned a bank, the Bank of St. Elizabeth, for decades. His brother, Brice Luetkemeyer, is the bank’s president.

But Luetkemeyer’s questions and those of his colleagues resulted in Jelena McWilliams saying her agency would look into the issue.

For his part, NCUA Chairman Rodney Hood defended the practice of credit unions buying banks as the free enterprise system at work.

Among those leading the ICBA’s campaign is Michael Emancipator. If that name sounds familiar, it should.

Before Emancipator became vice president and regulatory counsel at the ICBA, he spent a bit more than two and a half years as NAFCU’s senior regulatory affairs counsel. And before that, he spent almost five years as an assistant vice president at Callahan & Associates.

In an email exchange, Emancipator declined to discuss his change of heart and why he went to what you readers consider “the dark side.”

Such job changes aren’t rare in D.C., where expertise in complex subjects demands a nice salary.

Still, (please excuse the expression), Emancipator knows where the bodies are buried.

It’s clear that the ICBA campaign isn’t going away, particularly since members of Congress are now raising the trade group’s concerns.

Roger Williams, Capitalist

By any measurement, Rep. Roger Williams (R-Texas) is rich. Roll Call, the Capitol Hill newspaper, ranked the wealthiest members of Congress and last year, it identified the car dealer as the 22nd richest member, with a net worth of $27.7 million.

So, it’s no great surprise that Williams considers himself a capitalist.

And I guess he wants to know if everybody else is as well.

There’s really no other way to describe his behavior at hearings held by the House Financial Services Committee.

While some members spend the precious five minutes they have to question witnesses about complicated policy matters, Williams typically begins his questioning by asking witnesses whether they are capitalists.

And at one recent session, he asked witnesses who had previously appeared before the committee whether they are still capitalists.

Endearing?

Goofy?

Your choice.

Desk 88

If you’re holiday gift shopping for a political junkie, you might consider the new book, “Desk 88,” by Sen. Sherrod Brown (D-Ohio), the ranking Democrat on the Senate Banking Committee.

It’s a fascinating story about the former senators who shared the desk that Brown now occupies in the Senate chamber.

Senators, in a move that Brown said is “reminiscent of middle school,” carve their names in the drawers of the desk they occupy in the Senate.

When he was elected, the progressive Democrat was looking for a desk on the Senate floor and was examining the names carved into them.

He wrote that the fourth desk he examined showed some familiar names:

Hugo Black of Alabama, George McGovern of South Dakota, Abe Ribicoff of Connecticut and a Kennedy, later identified as Robert.

Brown wrote that he had “found his Senate home.”

The book went on to trace the career of the eight progressive senators who occupied “Desk 88” in the Senate chamber.

Unlike many political books, it’s an easy read.

And worth a look.

And Finally

It’s been an eventful and busy year. There’s no need to catalog what that means. You know.

And next year is likely to be even crazier.

I’d like to thank you folks for reading these rantings of a geezer journalist. And I hope you and your family and friends have the happiest of holidays and a healthy, happy, peaceful and prosperous 2020.

David Baumann is a correspondent-at-large for CU Times. He can be reached at dbaumann@cutimes.com.