Credit unions are coming – and you’ll see and hear them

But they are also gathering to advocate for credit union members– to protect them from rising costs, to allow the financial institutions they own build more capital, to help them help the economy recover and grow – and to ensure that their credit unions are around to serve them for a long, long time.

Here’s what they will have to say:

1. Rising Costs. New rules on debit Interchange – the product of the Dodd-Frank bill passed last year – will very likely result in costing consumers more money. Interchange is a fee paid by merchants to credit unions and banks that issue debit cards, their fair share of the cost of the payment card system.

But the law compels the Federal Reserve to draw up new rules which dictate the amount financial institutions may receive in Interchange fees.

It’s true that the law exempts most credit unions; but the new rules will affect how credit unions serve their members, because the law and rules do not give the Fed authority to enforce the exemption.

For example, the proposed rules by the Fed limit fees so much that they will likely fall far short in how much it costs a credit union to offer a debit card program to its members.

For credit unions, that means a choice: Drop their program entirely, or charge a fee to members who want debit cards – which will fall especially hard on those who are least able to afford it.

Credit unions will be pushing for legislation to delay the implementation of the debit Interchange regulation so the impact on consumers and small issuers can be studied — and so Congress can start over on this issue.

2. Bolster safety and soundness. Credit unions can only build net worth – what other financial institutions would refer to as “capital,” or money set aside to cover unforeseen circumstances – by what they save after all the bills are paid.

But, when revenue from loans and other sources is limited (such as during an economic downturn), and expenses are static or, worse rising, credit unions quickly feel the pinch.

To help, credit unions propose allowing them to build capital from sources other than what they save after paying all expenses – which would help them more effectively meet any unexpected changes, such as a slow economic recovery.

In no way do credit unions advocate changing their cooperative model – they still insist that members alone own their institutions. But, they do want the opportunity to build capital from other sources, under proper regulatory circumstances.

3. Help the economy recover and grow. Credit unions have been asking for more authority to make business loans – which they estimate will add 100,000 or more new jobs in one year at no cost to taxpayers.

We came close to winning that authority in the last Congress, and we’re back again, asking only to give credit unions the chance to fill the demand from their members for credit to build and grow their businesses.

4.Keep credit unions intact. Credit unions want lawmakers to understand that their federal tax exemption—granted because credit unions are not-for-profit, member-owned cooperatives—is central to their structure.  Its loss would likely mean the demise of most credit unions.  And that would be a huge loss to consumers.  For every dollar gained by the exemption, credit unions return $10 to consumers in the form of better rates and lower fees.

So, when you see these thousands of credit union folks, please embrace their message. They are here to advocate solutions for their consumer owners – more than 92 million of them, who count on their credit unions every single day as their best option for conducting financial services.

Bill Cheney is the president and CEO of the Credit Union National Association (CUNA).