Credit unions' tilt toward the GOP could come at a cost
The credit union industry may come to regret its increasingly right-leaning tilt.
The movement likes to tout its bipartisan nature, but political donations show the industry favoring Republicans, if only by a small margin. Credit unions – including individuals and organizations – have given about $11.6 million to Republicans since 2010, compared with $10.5 million for Democrats, according to data from OpenSecrets.
Excluding the current campaign, credit unions have favored Republicans in all but two elections since 1996.
The Credit Union National Association’s annual Governmental Affairs Conference takes place in Washington this week, with three days of speeches from policymakers and regulators, and in-person visits between credit union professionals and their local representatives in Congress, many of whom will be looking for the industry’s support in November’s election.
Credit unions, like other financial institutions, tend to favor deregulatory policies that Republicans have traditionally advocated for in Congress, such as deregulation. Some credit union experts have noticed the industry is increasingly embracing conservative ideology and politicians at the risk of alienating those with different political beliefs. That could become a problem as credit unions look to entice a younger demographic.
“I think the center of gravity of credit union leadership tends to be to the right of center,” said Cliff Rosenthal, former CEO of the National Federation of Community Development Credit Unions, which is now known as Inclusiv. “I think that will not be very helpful in terms of attracting a younger generation … that is more progressive and more attracted by social change to address issues like economic inequality.”
Still, the country as a whole has become more partisan, and many Washington observers said they have never seen this level of political polarization. Many congressional votes closely follow party lines, leaving few issues that both Democrats and Republicans can agree upon.
The industry has frequently advocated for more conservative financial services policy. For instance, industry trade groups have supported the appointment of people to the Consumer Financial Protection Bureau who are “very much opposed to consumer protection and the CFPB,” Rosenthal said.
But the right-leaning tendencies also go beyond policy to publicly embracing President Donald Trump and his administration. For instance, in October, Rodney Hood, chairman of the National Credit Union Administration, was criticized for appearing in a video posted to social media praising Trump’s policies. Sen. Sherrod Brown, D-Ohio, questioned whether Hood, who was appointed to the board by Trump, had violated the Hatch Act.
“NCUA is an independent agency of the federal government,” Rosenthal said. “It’s not a tool of the executive branch. So this kind of stuff undermines people’s understanding" of what the credit union movement is about.
NCUA declined a request for comment.
Still, others acknowledged that this politicization isn’t a novel concept. It’s necessary for the various trade groups and industry leaders to financially support candidates from both major parties who are likely to advance the industry’s agenda, former NCUA Chairman Dennis Dollar wrote in an email.
“The politicization of the credit union industry is nothing new, will always be the case and frankly it must,” Dollar wrote. “Credit union competitors are playing the political game, so credit unions have to be involved at all levels and with both parties to protect their turf.”
The NCUA board could even be considered inherently political since law requires that it has at least one member from the president’s opposing party.
“There’s not a single NCUA board member who’s been nominated who hasn’t been political,” said Geoff Bacino, a former board member. “Everyone has that tie, so sometimes it’s hard to take the politics out of it.”
CUNA has seen increased concern from members on its selection of particular speakers for events over the last few years, said Todd Spiczenski, CUNA’s chief products and services officer. The trade group tries to be responsive to its members by hosting focus groups to gather feedback.
GAC speakers are meticulously selected, with formal invites sent to Congress six to 10 weeks before the event. The group tries to ensure a bipartisan mixture of keynote speakers. Historically, CUNA invites the current administration out of courtesy and last year, the office of the vice president responded.
At last year’s event, Vice President Mike Pence became the first sitting member of the executive branch to address the conference since 1950, but his remarks proved divisive when he urged attendees to support the administration’s immigration policies.
But once a speaker takes the stage, CUNA has “little to no control” over what the person says, Spiczenski said.
After last year’s backlash to Pence’s speech, the trade group has tried to be more transparent when a speech is being broadcast live and streamed on Facebook, said Ryan Donovan, CUNA’s chief advocacy officer.
If "folks knew that a major national political figure" was] giving a talk that the media had determined was [significant enough] to be carried live on TV," then "that would come with an understanding that the message might be broader than the more narrow subject matter of the conference,” Donovan said.