Merriam-Webster declared "pragmatic" the word of the year for 2011. The National Association of Federal Credit Union's (NAFCU) epitomized this quality and leveraged its stalwart spirit to advance credit unions in a challenging policy-making climate.
To this end, NAFCU worked vigorously to challenge the Dodd-Frank Act's onerous interchange amendment. Despite our efforts, the Federal Reserve announced the final debit card fee rule on June 29. While it was an upward adjustment of the proposed interchange fee cap, it still left much to be desired for consumers and Main Street institutions like credit unions.
Perhaps the most positive outcome from the interchange rule was the unexpected windfall after the rule took effect on Oct. 1, when Bank of America announced it would be charging customers $5 to use their debit cards. This was the last straw for an American public who had simply had enough of Wall Street institutions, and so they mobilized and Bank Transfer Day (Nov.5) was born.
Credit unions garnered a priceless store of goodwill and good press because of Bank Transfer Day. We must not squander it. It is the strict adherence to our prudent business model and commitment to our members' financial well-being which led to this grassroots outpouring of support. That's why we must continue to stick with our basic principles, promote financial literacy, protect our members from unscrupulous predatory lending practices and maintain our vigilance on data security.
Another dimension of the Dodd-Frank Act was the creation of the Consumer Financial Protection Bureau. On July 21, the new agency opened its doors and took over responsibility for the consumer credit rules from seven different federal agencies. Though no director has been named, the CFPB has already begun work on a number of projects and rules that will affect credit unions and their members. NAFCU staff has been in regular contact with the CFPB. In December, the NAFCU Board met with Raj Date, special advisor to the secretary of the Treasury for the CFPB, and other key members of the agency's staff to ensure credit union interests are represented.
Continue To Push For MBL Relief
On Capitol Hill, NAFCU continued to press for expansion of member business lending. In March, Senator Mark Udall (D-CO) introduced bipartisan legislation - the "Small Business Lending Enhancement Act" (H.R. 5297) that would lift the arbitrary member business lending cap from 12.25% to 27.5% of total assets. In April, Reps. Ed Royce (R-Calif.) and Carolyn McCarthy (D-N.Y.) introduced identical legislation (H.R. 1418) in the House. Both these bills continue to garner support.
Looking ahead, credit unions and our members' future vitality will be best served with a focus on strengthening our fundamentals. We must also work to enhance the federal credit union charter. In this last legislative session, the credit union tax exemption became the object of review as part of the Joint Select Committee on Deficit Reduction activities. While the committee failed to make specific recommendations, we must continue to remind Congress of the unique status of credit unions.
If past is prologue, there will likely be unforeseen events that surface in the coming year. As we have seen recently, through the example of Bank Transfer Day, there will be occasions when such unforeseen events provide our industry unique opportunities. While we position ourselves to capitalize on these events, we must continue to provide steadfast value and appreciation to our credit union members. Ultimately, each of our members is also a powerful ambassador. With every transaction, we have the opportunity to make them great envoys for our institutions and for the credit union movement.
'Be A Yardstick'
In 2012, I am confident that credit unions will have another successful year. NAFCU will continue to champion credit unions with Congress, policymakers and the media. Based on our renewed visibility, if we stand by our exceptional standards of member service we can and will prosper.
The late Steve Jobs, Apple founder and innovator extraordinaire captured it best when he said, "Be a yardstick of quality."
Michael N. Lussier, president and CEO of Webster First FCU, Worcester, Mass., is NAFCU chair and he may be reached at 800-962-4452.
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