2024 Elections: What Credit Unions Need to Know - A Seismic Shift in the Regulatory Landscape
I sat down with credit union industry pundits John Mckechnie and Geoff Bacino to discuss what the election means for credit unions. The following summarizes the podcast interview:
The 2024 elections have reshaped the political landscape in Washington, with significant implications for credit unions. As former President Trump returns to office and Republicans gain control of the Senate, the industry faces both challenges and opportunities. Here's what credit union leaders need to understand about the changing environment.
The New Political Reality
The election results signal major changes in key regulatory and oversight positions. With Republicans gaining control of the Senate and Trump's return to the White House, we can expect swift action on several fronts that will impact credit unions:
• Senate Banking Committee Leadership: With Sherrod Brown's defeat, Senator Tim Scott is positioned to take the committee's helm. Perhaps more surprisingly, Elizabeth Warren is likely to become the ranking Democrat on the committee, promising spirited debates on financial regulation.
• Regulatory Leadership: At NCUA, expect Chairman Todd Harper to be replaced by Kyle Hauptman as chairman, though the timing and duration of this change remain uncertain given Hauptman's term expires in August 2025.
Critical Issues on the Horizon
1. Tax Reform Looms Large
Industry veterans are warning that tax reform could come quickly in 2025. Both Democrats and Republicans have signaled a "360-degree review" of tax exemptions. The banking industry continues to challenge credit union tax status, making this a critical focus area for advocacy efforts.
2. Regulatory Approach
The change in NCUA leadership will likely bring a shift in regulatory philosophy:
• Less emphasis on consumer compliance initiatives
• More deregulatory approach aligned with Republican priorities
• Potential changes in oversight of areas like overdraft protection and third-party vendors
3. CFPB Changes
Expect significant changes at the Consumer Financial Protection Bureau under the new administration, potentially affecting credit union compliance requirements and supervision.
Action Items for Credit Unions
1. Strengthen Advocacy Efforts
• Make GAC attendance a priority in 2025
• Maintain regular contact with congressional representatives
• Engage with lawmakers when they're in their home districts
2. Prepare for Quick Changes
• The new administration, having previous experience, may move faster on priorities
• Two-year window before midterms could accelerate policy changes
• Stay informed about transition team appointments as indicators of policy direction
3. Build Bipartisan Relationships
Despite the Republican trifecta, maintaining relationships across party lines remains crucial. As one veteran lobbyist noted, "We're all Americans. Let's just live good lives and get stuff done."
Looking Ahead
The industry faces a crucial period requiring vigilance and engagement. While credit unions have strong arguments for maintaining their current status, they'll need to work harder to make their case. The combination of:
• Potential tax reform
• Leadership changes at NCUA
• Shifting regulatory priorities
• New congressional oversight
Creates both challenges and opportunities for the industry.
Bottom Line
Credit unions must prepare for significant changes while remaining engaged in the political process. The next two years could bring substantial policy shifts affecting the industry's regulatory and tax environment. Success will require proactive engagement, strong advocacy, and unity within the credit union movement.
As one industry expert noted during the discussion: "The next two years are going to put a premium on us being really sharp, really up our game. And when I say 'our,' the entire industry - everybody's got a role to play."
---
This analysis is based on expert discussion from industry veterans including John McKechnie and Jeff bacino, featuring insights from their extensive experience in credit union regulation and advocacy.
Comments