[Congressional Record Volume 143, Number 40 (Tuesday, April 8, 1997)]
[Extensions of Remarks]
[Pages E596-E597]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    AMERICA'S FEDERAL CREDIT UNIONS

                                 ______
                                 

                        HON. BENNIE G. THOMPSON

                             of mississippi

                    in the house of representatives

                         Tuesday, April 8, 1997

  Mr. THOMPSON. Mr. Speaker, I would like to express my support for 
America's Federal credit unions on behalf of at least 35,000 people 
residing in the Second Congressional District who depend on them to 
receive financial services. As you may know, the original legislation 
that created Federal credit unions in the 1930's required that their 
members share a ``common bond of occupation or association.'' Over the 
years, this statute has been interpreted in a fashion that allows 
employees from many different companies to join the same credit union. 
However, in the 1994 Federal District Court case of National Credit 
Union Administration versus First National Bank & Trust and its 
subsequent appeals, it was ruled that credit unions must have a 
``single common bond of occupation.'' In other words, all the members 
of the credit union must work for the same employer.
  Although the Supreme Court has decided to hear this case, credit 
unions all across the Nation have been forced to cease accepting new

[[Page E597]]

members from employers outside of those who already belong while they 
wait for the final ruling. In addition to this disruption in the 
industry, if this case stands, credit unions may be forced to exclude 
all employers with the exception of the single original employer that 
the credit union received its charter to serve.
  Mr. Speaker, credit unions are the last source of financial services 
for millions of Americans who do not have the credit background to 
receive help from traditional banking institutions. If this case is 
allowed to stand, as many as 10 million current credit union members 
could be expelled from their credit unions, and services could be 
interrupted for all 70 million American credit union members. Many 
critics of credit unions feel that they have become a threat to the 
banking industry. However, according to the Credit Union National 
Association, the average credit union has less than $28 million in 
assets--less than one-sixteenth the size of the average bank. In fact, 
Chase and Citibank, the two largest U.S. banks, combined have more 
assets than the aggregate holdings of all 12,047 credit unions. I do 
believe that banks play an important role in America's economy, but I 
believe that a balance can be found between their needs and those of 
the credit union industry. Banks are likely to remain America's chief 
source of financial services, but there is no reason that a thriving 
credit union industry cannot survive and continue to serve those people 
who cannot be helped by banks. Mr. Speaker, it could take many months 
before the Supreme Court makes its final decision on this case. The 
credit union industry can not hang in limbo while it waits for the 
Supreme Court to act. Representative LaTourette has introduced a bill 
to this Congress in order to clarify this issue. The Credit Union 
Membership Access Act of 1997, of which I am a cosponsor, will protect 
the status quo by allowing employees from more than one company to 
become members of the same credit union. I support this legislation 
wholeheartedly, and I urge this Congress to act to prevent a disaster 
for America's credit union industry.

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