[Congressional Record Volume 144, Number 24 (Tuesday, March 10, 1998)]
[House]
[Page H930]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  FEDERAL CREDIT UNION MEMBERSHIP ACT

  The SPEAKER pro tempore (Mr. Jenkins). Under a previous order of the 
House, the gentleman from Maryland (Mr. Ehrlich) is recognized for 5 
minutes.
  Mr. EHRLICH. Mr. Speaker, after months of waiting, the Supreme Court 
recently rendered a decision in the AT&T Federal Credit Union case. The 
court held in a 5-to-4 decision that five North Carolina banks had 
standing to challenge the NCUA's 1982 common bond interpretation. 
Furthermore, of the justices that contemplated the ``field of 
membership'' issue, the court held 5-to-0 that some credit unions had 
overstepped the membership limits contained in the 1934 Federal Credit 
Union Act.
  All eyes are on Congress to resolve this important issue.
  Mr. Speaker, I rise today not to talk about the problems facing 
credit unions, but to offer a solution. Today I will be introducing the 
Federal Credit Union Membership Act of 1998. While there are many 
``field of membership'' proposals on the table and indeed a bill that 
codifies the 1982 interpretation, I am taking a quite different 
approach to resolving this issue.
  The purpose of my bill is not to placate either side, the banks or 
the credit unions. Rather, I wish to restore credit unions as we the 
Congress intended them to be when originally chartered, not what some 
credit unions have become or what banks want them to be. Congress 
chartered credit unions with the purpose of restricting them to members 
who share a common bond. Quite simply, the common bond constitutes the 
union in credit union.
  The 1982 interpretation and current legislative proposal supported by 
the credit unions establishes no discernible limit on membership and 
therefore no common bond or union.
  In fact, Justice Thomas wrote in a Supreme Court ruling that 
``Section 109 cannot be considered a limitation on credit union 
membership if at the same time it permits a limitless result.'' 
Accordingly, my bill restores the limitations originally placed on 
credit union membership.
  As times have changed and financial markets have evolved from the 
post-Depression era, I recognize credit union membership must be made 
available to a broader segment of our population. Further, in today's 
society we most closely identify ourselves by our profession or career. 
Thus, my bill creates a new ``field of membership'' entitled ``trade'' 
credit union.
  The ``trade'' credit union is defined as members of a group that 
share a common trade, profession or occupation. As promised to my 
constituents, my proposal maintains the tax status of credit unions and 
exempts them from regulatory burdens like CRA. Imposing such conditions 
begs the following question: If a credit union is not subject to 
membership limits, pays taxes and conforms to CRA requirements, what is 
the distinction between such an institution and a mutual savings bank? 
I contend it would be so similar there would be no justification for 
maintaining the Federal credit union charter and the NCUA.
  Finally, my bill protects current credit union members by 
grandfathering all members of a Federal credit union prior to February 
25, 1998. The bottom line, Mr. Speaker, is that credit union members do 
not need to worry about being divested or losing the membership 
privileges they currently enjoy.
  Industry groups have dug in on both sides of this debate. Still, I 
hope and believe this bill will serve as a middle ground which 
addresses legitimate grievances by banks with regard to the limits of 
field of membership and allows credit unions to expand and prosper in a 
safe and sound manner.
  As Congress moves forward, Mr. Speaker, with modernizing banks and 
other financial institutions, we should also update the 1934 Credit 
Union Act and bring credit unions into the 1990s.
  For my colleagues who are interested in my approach and seek to 
resolve this important issue, I ask that they join me as a cosponsor of 
the Federal Credit Union Act of 1998.

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