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Credit unions keep watchful eye as political conventions unfold

Asthe Republican National Convention unfolds this week in Cleveland and Democratsprepare to convene in Philadelphia next week, credit unions around the U.S. areleft to wonder which outcome in the presidential election would benefit themmost.

Financialinstitutions, in general, lean more to the right because the Republicanplatform typically includes smaller regulation, but the wildcard this timearound is the lack of a political voting record from Republican presidentialnominee Donald Trump, said Geoff Bacino, a credit union consultant and a formerboard member at the National Credit Union Administration. Bacino,who was appointed by President Bill Clinton to the NCUA board in 2000, said inan interview that Republican credit union leaders he has spoken with are a bitunnerved because they are not sure what a Trump presidency would mean for theindustry.

"Forthis election, it's a tough call because of the debate on what Trump might doas he doesn't have any real track record because he's never been elected,"he said.

Bacinosaid the platforms of both parties are more focused on dealing with the biggestbanks in the country than the smaller institutions. Credit unions will have ahard time looking at the platforms and feeling that one is more advantageousfor the industry than the other, he said.

TheGOP platform, released late July 18, includes a return of the , as proposedby Trump. Bacino said that move might be due to the fact that Hillary Clinton'shusband, Bill, signed the Gramm-Leach-Bliley Act into law, which essentiallyrepealed Glass-Steagall.

RichardGose, senior vice president of political affairs for the Credit Union NationalAssociation, said in an interview that CUNA never takes a position in thepresidential races but instead works with all of the candidates.When reviewing platforms, CUNA's main concern is looking for anything thatcould get in the way of credit unions' ability to serve their members,especially additional regulatory burdens or language that could affect theirtax-exempt status.

Gosesaid there was nothing that stood out as either pro- or anti-credit union ineither party's platform this year. A Democratic Party draft released July 1includes promises to fight "greed, recklessness, and illegal behavior onWall Street" and force the financial sector to "work for thejob-creating, productive economy."

Asfar as Trump's political inexperience, Gose said that is a situation CUNA dealswith all the time, although maybe not regarding presidential candidates. Manytimes, contenders for congressional seats have held no prior elected positions,he said. "It's kind of wait-and-see. That's why we don't really endorse,"Gose said.

Bothof the presidential candidates have talked about the need for a strong, viablemiddle class, and that is an idea that CUNA agrees with wholeheartedly, Gosesaid.

Oneother major credit union trade association — the National Association of FederalCredit Unions — has a team in Cleveland this week focused on bringing the regulatoryburden on credit unions to the attention of lawmakers and other policymakers.

Bacino,the consultant with Bacino & Associates, said a bigger concernfor credit unions than the presidential race could be which party controls theSenate. "It's going to be more of a bellwether for credit unions," hesaid. There are 34 Senate seats at stake in this year's election, and 24 arecurrently held by Republicans. Key Senate battleground states include Ohio,Florida and North Carolina.

Bacinosaid Sen. Sherrod Brown from Ohio will likely become chairman of the SenateBanking Committee if the Democrats take control. He said such a committee wouldlikely be more consumer-oriented, and there would likely be little change tothe Consumer Financial Protection Bureau. But if the Republicans keep controlof the Senate and gain the White House, there will be strong movement to scaleback the CFPB, he said. The agency has been a of many credit unions.

Anotherformer NCUA board member, Michael Fryzel, predicted in a July 12 blogpost on CUInsight that this presidential election will have more books writtenabout it than any other in U.S. history. Fryzel, who now works as an attorneyand credit union consultant, said that if Trump wins the election he willsupport legislation requiring greater accountability from regulators."There would be proposed changes to Dodd-Frank, and the CFPB would get amakeover resulting in a major impact on the financial services industry,"he wrote. "Heads of departments and agencies would be appointed who wouldfollow the philosophy of as much regulation as needed and as little aspossible."

Fryzelpredicted there will be very little change in financial regulation if Clintonwins the presidency.