Co-ops and credit unions respond to Donald Trump’s State of the Union speech

NCBA CLUSA and NAFCU encouraged members to champion legislation and policy that supports co-operatives and credit unions

On Tuesday, 5 February President Donald Trump delivered his second State of the Union Address to the Congress. The speech touched on his immigration reform, tax cuts and the need for structural investments.

Reflecting on the address, the National Co-operative Business Association (NCBA CLUSA) urged continued bipartisan solutions to national challenges. The trade body also encouraged members to champion legislation and policy that supports co-operatives.

“Congress and the administration have the opportunity to help people capture economic opportunities through the co-operative business model – a model where people own, control and benefit from the businesses they use. NCBA CLUSA looks forward to continuing its work with Congress and the administration so more people have access to the critical financing and technical assistance needed for people to establish and grow these member-owned businesses,” read a statement published by NCBA.

The USA has more than 65,000 co-operative businesses. Through the Interagency Working Group on Cooperative Development, NCBA works directly with federal agencies on issues important to members of co-operatives.

NCBA pointed out that employee ownership through worker co-op conversions was an emerging strategy to strengthen and preserve businesses nationwide.

“Fair tax treatment will keep co-operatives from being harmed in tax legislation that would directly affect working families, small businesses and farmers,” it said. “With new authorities in Rural Cooperative Development Grant (RCDG) program to analyse forthcoming census data and the opportunities afforded by the Main Street Employee Ownership Act, now is the time to increase investment in rural economic growth.

“Co-operatives are key stakeholders in international development around the world, supporting self-determination initiatives that enable people to better provide for themselves, their families and their communities. We encourage you to add you voice to these efforts.”

Credit unions were also quick to react to the speech. The National Association of Federally-Insured Credit Unions (NAFCU) reiterated its call for housing finance reform and a national data security standard.

NAFCU has been advocating for a legislative solution to reform the USA’s data security system.

“In addition to sharing its data security principles with the Senate Banking Committee, the association has urged the House Financial Services Committee to address data security to ensure consumers are protected,” it said in a statement.

In terms of housing finance reform, NAFCU urged the Trump administration and Congress to work together on a “comprehensive solution” to housing finance reform, arguing that “the continued conservatorship of the government sponsored enterprises (GSEs) is unsustainable.”

GSEs are agencies created by acts of Congress, which are privately held and provide public financial services. They allow credit unions to access the liquidity necessary to provide mortgages to their member-owners. NAFCU is asking that GSE pricing for loans be based on loan quality and not quantity to prevent discriminating against a financial institution based on the type of institution, an institution’s asset size or any other geopolitical factors.

“As the credit union industry’s Washington watchdog, NAFCU will continue to work across the aisle and with key decision makers to obtain a regulatory environment in which growth is the priority,” it added. “Other priorities include maintaining a strong NCUA, promoting transparency, attaining regulatory relief, preserving the credit union tax exemption and establishing a fair and innovative market.”