[Congressional Record Volume 144, Number 29 (Tuesday, March 17, 1998)]
[Extensions of Remarks]
[Pages E400-E403]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    SUPPORT GROWS FOR CREDIT UNIONS

                                 ______
                                 

                         HON. PAUL E. KANJORSKI

                            of pennsylvania

                        HON. STEVE C. LaTOURETTE

                                of ohio

                    in the house of representatives

                        Tuesday, March 17, 1998

  Mr. KANJORSKI. Mr. Speaker, my colleague, Mr. LaTourette and I wish 
to state that support for H.R. 1151, the Credit Union Membership Access 
Act, continues to grow. Below are ten of the more than 100 editorials 
from newspapers all across our nation which support giving consumers 
the right to chose a non-profit, cooperative, credit union for their 
financial services.
  Surveys have consistently shown that consumers strongly support the 
value and services they receive from their credit unions. That is why 
the Consumer Federation of America endorses H.R. 1151, the Credit Union 
Membership Access Act.
  A bipartisan group of more than 190 Members from all regions of our 
country, and all parts of the political spectrum, are now cosponsoring 
the Credit Union Membership Access Act. We should pass it quickly so 
that credit unions can stop worrying about their future and return to 
serving their members.

                   [From the USA Today, Mar. 4, 1998]

              Courts Slap at Credit Unions Hurts Consumers

       Consumers seeking bank services want low costs, higher 
     returns and convenience. Last week, the Supreme Court struck 
     a blow against all three.

[[Page E401]]

       In deciding by a 5 4 vote that multiemployer credit unions 
     were, in effect, illegal, the court put a halt to credit 
     unions' rapid growth, up 12 million members since 1990.
       Current multiemployer credit unions are expected to be 
     allowed to continue. But the ruling threatens to reduce 
     competition for banks by preventing millions of other 
     Americans from joining them.
       Nonprofit credit unions are mostly employer sponsored and 
     employee run. To be financially viable, each needs 500 
     members--more than most small businesses have. If they can't 
     jointly sponsor credit unions, their workers must do without.
       This suits bankers fine. They claim credit unions offer 
     higher interest on savings and lower rates on loans because 
     they don't pay income taxes. That's OK, they said, if 
     membership is strictly limited. But opening credit unions to 
     a wide array of people, as multiemployer ones do, damages 
     banks and robs taxpayers, they argue.
       There's only one problem with that reasoning. History shows 
     it to be false.
       Federal regulators urged small credit unions to merge 15 
     years ago to prevent them for going under, which could have 
     hit taxpayers the way savings and loan failures did. And 
     despite their rapid growth since, they've hardly hurt banks.
       Credit unions' share of the nation's financial assets is 
     struck at 2%. Only 1% of their loans go to commercial 
     ventures, where banks make their big money. And even in 
     consumer lending, at which credit unions excel, they haven't 
     made big inroads. A federal study last year found banks' 
     share of family debt climbed from 29% to 35% between 1988 and 
     1996 while the share owed credit unions rose from a mere 3.3% 
     to hardly awesome 4.2%.
       Meanwhile, bank profits are at record highs, with fee 
     income rocketing.
       Those fees, on everything from counter service to ATMs, 
     added $50 billion to banks' bottom lines last year. Banks say 
     they're needed to cover the $250 annual cost of maintaining 
     an account. But they're also high enough to force 13% of 
     families out of banks and into the hands of costly check 
     cashing outlets and pawnshops.
       Even professionally managed credit unions still have 
     policies set by member elected volunteer boards. They strive 
     to keep services affordable, so fees average 40% below those 
     of banks. At most, people eligible to enroll can open 
     accounts with $25 or less. Try doing that at a bank.
       Congress recognizes the need. It is considering legislation 
     to preserve that access.
       Doing so won't hurt banks. It will cost taxpayers nothing. 
     It only ensure consumers have the choices they deserve.
                                                                    ____


         [From the Los Angeles Times Editorials, Feb. 27, 1998]

                      New Credit Union Law Needed

       There are a lot of angry members of credit unions across 
     the country, grousing with good reason about the Supreme 
     Court's decision to restore limits on who can join these 
     nonprofit cooperatives. Going back to a strict reading of an 
     old law, the court ruled 5 to 4 that credit union members 
     must be individuals within a single company, community or 
     occupation.
       Congress needs to act to reverse the ruling, a major 
     setback for credit unions although there will be no immediate 
     effect on current members. The organizations have greatly 
     expanded their memberships since 1982 when federal regulators 
     relaxed the membership rules to allow a credit union to 
     accept individuals from outside the group it was originally 
     chartered to serve. This ``multiple group'' policy helped 
     employees of small companies join credit unions chartered by 
     larger ones and allowed credit unions at downsized companies 
     to diversify to stay in business.
       Federally chartered credit unions date back to the 
     Depression, when banks were unwilling or unable to make small 
     loans to workers. And consumers still want and need a choice 
     beyond conventional banks, which hardly put out the welcome 
     mat for small accounts.
       The original Federal Credit Union Act of 1934 said members 
     must be part of ``groups having a common bond of occupation 
     of association'' such as employment in the same company or 
     membership in the same church. After regulators relaxed the 
     rules, banks mounted court challenges claiming that credit 
     unions were building conglomerates and had unfair tax 
     advantages as nonprofit corporations.
       Anticipating the Supreme Court's ruling, credit unions have 
     been at work in Washington on legislation to change the law 
     to ease its restrictions on membership. Attention is focusing 
     on HR 1151, a bipartisan bill introduced by Rep. Paul E. 
     Kanjorski (D-Pa.) and Rep. Steven C. LaTourette (R-Ohio-- 
     that has 136 co-sponsors. Committee hearings on credit union 
     membership begin week after next.
       What lawmakers will hear is that credit unions have 
     attracted 71 million customers because of lower fees, fast 
     emergency loans and better rates on loans and savings. Credit 
     unions hardly pose a threat to banks, which, according to 
     LaTourette, hold 93% of all savings and deposits and 94% of 
     all loans. Consumers deserve alternatives; credit union 
     membership restrictions should be amended.
                                                                    ____


                    [From The Record, Mar. 2, 1998]

                       Support for Credit Unions

       In ruling in favor of the banking industry in its fight to 
     stop credit unions from expanding, the U.S. Supreme Court 
     probably made the right legal decision last week.
       But Congress should write into law the practices 
     invalidated by the court. Credit unions offer consumers 
     choice and affordable services, and they encourage people to 
     save who probably wouldn't otherwise. That's good for 
     everyone.
       By a 5-4 vote, the court ruled that the federal government 
     went too far in 1982 when it allowed federally chartered 
     credit unions to recruit members who weren't linked by 
     occupation or location. The 1934 federal law that authorized 
     credit unions had limited their membership to groups with a 
     ``common bond.''
       Justice Clarence Thomas wrote that the government's 
     interpretation of the law made it permissible ``to grant a 
     charter to a conglomerate credit union whose members would 
     include the employees of every company in the United 
     States.'' That wasn't the intent of the law.
       But now that the court has ruled against credit unions, the 
     situation for 20 million customers who joined after the 
     government relaxed membership requirements is uncertain.
       Federal lawmakers can end this limbo with legislation 
     allowing credit unions to continue to operate under the more 
     flexible rules established by Washington.
       Such a move has bipartisan support, but don't expect the 
     powerful banking lobbyists to lie down and allow it to become 
     law. Banks complain the credit unions are competitors who are 
     allowed to play by a different set of rules. Credit unions 
     don't have to pay federal taxes or abide by fair-lending 
     laws.
       But credit unions aren't as much of a threat as the banking 
     industry would have us believe. According to the New Jersey 
     Credit Union League, the assets of the average commercial 
     bank are nearly 30 times that of a credit union. And if 
     people are opting for credit unions instead of banks, it's 
     because of the lower fees and interest rates.
       A study by the Consumer Federation of America showed that 
     credit union fees are about 40 percent lower than bank fees. 
     That's a problem banks can address without squashing credit 
     unions. Changing the law to allow credit unions to continue 
     to expand memberships within reason would be a victory for 
     consumers.
                                                                    ____


             [From the Birmingham Post-Herald, May 7, 1997]

                     Giving Credit to Credit Unions

       Credit unions, which have been helping people with their 
     financial needs for more than six decades, are themselves in 
     need now. They need to win a legal fight and, failing that, 
     they need some political help from Congress. If they don't 
     get it, the credit unions themselves may no longer be 
     available for millions when they come knocking, and American 
     consumers, especially those of modest means, will have reason 
     to grieve.
       Congress established credit unions as nonprofit 
     cooperatives in 1934 chiefly for poorer people left out of 
     the loop by banks. It required that members have a ``common 
     bond,'' such as being employees of the same company.
       The formula worked fine until the late 1970s, when the 
     disappearance of large manufacturing plants and other 
     economic changes began robbing the credit unions of members. 
     A federal agency then said a credit union could include a 
     multitude of groups in its membership in order to maintain a 
     sufficiently large operational base.
       The commercial banks yelped. What's more, they sued. They 
     maintained that the federal agency, The National Credit Union 
     Administration, had misconstrued the law and a federal judge 
     said the commercial banks were right. The Supreme Court has 
     agreed to hear the case either late this year or early next.
       If the high court concurs with lower court rulings, some 10 
     million people will no longer be members of credit unions, 
     and millions more may never get the chance.
       That would be a shame because credit unions normally pay 
     higher rates of return on deposits and charge less interest 
     on loans than banks. They tend to be easy and friendly to 
     deal with, partly because the directors are likely to be the 
     consumer's fellow workers.
       Banks say the competition from the credit unions is unfair 
     because they don't pay taxes. It's true that as nonprofit 
     organizations the credit unions don't have profits to pay 
     taxes on. Their members do pay income taxes on any dividends.
       If the credit unions lose in court, Congress could quickly 
     come to the rescue with just a slight change in the 1934 
     law's wording about ``common bonds.'' There is some 
     bipartisan support for the amendment, though not exactly a 
     groundswell yet. You would think, at first blush, that there 
     would be more interest. After all, 70 million Americans 
     belong to credit unions, and that's a lot of voters.
       It's possible, of course, that another number speaks more 
     loudly in the legislative ear: 4.4 trillion, which is the 
     accumulation of dollars the banks have in assets, and more 
     than 12 times the assets of credit unions. The banks would 
     not seem to be at much of a disadvantage economically, after 
     all, although the credit unions may be at a disadvantage 
     politically.

[[Page E402]]

     
                                                                    ____
           [From the Wilmington Morning Star, Feb. 28, 1998]

                   Give Some Credit Where It's Needed

       About 650,000 Tar Heels are members of credit unions. A 
     Wednesday ruling by the U.S. Supreme Court threatens to take 
     away some of their choices and force them to pay more for 
     financial services.
       The fight now shifts to Congress, where support is building 
     to protect credit unions from being overwhelmed by big banks.
       Credit unions got started during the Depression, when some 
     banks refused to lend money to many Americans, particularly 
     those of modest means.
       As Justice Sandra Day O'Connor put it in a dissent to the 
     court's ruling in this case, ``Credit unions were believed to 
     enable the general public which had largely been ignored by 
     banks, to obtain credit at reasonable rates.''
       Federal regulators in 1982 allowed many credit unions to 
     expand their memberships beyond the original employees or 
     associations that they were established to serve.
       It is that expansion that bankers challenged in this 
     lawsuit which arose in North Carolina.
       The banks claim credit unions have an unfair advantage, 
     because they are exempt from federal taxes and have grown to 
     offer a wide range of financial services that make many 
     larger credit unions virtually indistinguishable from banks.
       Credit unions reply that they must be allowed to grow as 
     they compete with bigger banks for customers. And credit 
     unions still offer incentives to customers with smaller 
     amounts--the types of customers many of the growing mega-
     banks shun by charging them higher fees and interest rates.
       After winning in the Supreme Court, the banking industry 
     said it only wants to prevent future expansion of credit 
     unions and won't try to force current members out. But since 
     many credit unions have a large turnover in customers, the 
     need a steady flow of new customers to survive.
       The decision was barely filed before lobbying began for a 
     bill already prepared in Congress.
       It would change the 1934 law that created credit unions, 
     allowing them to include members from several businesses or 
     associations, instead of just one.
       There seems no other way to preserve financial institutions 
     that have helped so many families of modest means.
                                                                    ____


                 [From the Miami Herald, Feb. 28, 1998]

                          Banking on Lawmakers

       In the latest battle between banks and credit unions, the 
     banks won and consumers lost. A divided U.S. Supreme Court 
     ruled this week that a federal agency erred in 1982 when its 
     broad interpretation of a 1934 law let credit unions 
     substantially expand their membership.
       Granted, the law's language seems vague enough to lend 
     itself to varied interpretations. It says that federally 
     chartered credit unions' membership shall be limited to 
     groups having a common bond of occupation of association, or 
     to groups within a well-defined neighborhood, community, or 
     rural district.''
       Construed liberally, a ``common bond of . . . association'' 
     could even be interpreted to include persons freely 
     associating in order to open a credit union. For years, 
     though, most credit unions were restricted to employees of a 
     single firm or to members of a single labor union.
       In 1982, however, the national Credit Union Administration 
     sensibly ruled that credit unions could accept members from 
     multiple employers. The ruling helped credit unions expand.
       Healthy credit unions are vital for consumers in an era 
     when America's over-consolidating banks are gouging their 
     customers with ever-higher fees--and when job growth is 
     fastest at businesses that employ fewer than 50 workers each. 
     Such businesses obviously lack the critical mass to sustain a 
     credit union all by themselves. Yet courts are concerned with 
     what the law says, not with how an interpretation might 
     affect the marketplace.
       So it's therefore hard to fault this ruling on legal 
     grounds. Indeed, the 5-4 majority joining in Justice Clarence 
     Thomas's majority opinion cut across the court's usual 
     ideological fault-line to include Justice Ruth Bader 
     Ginsburg, a Clinton appointee. And the dissenters merely 
     argued that the banks had lacked the standing to sue.
       Although the court decided who won this battle, Congress 
     and the states will decide who wins the war. On Capitol Hill, 
     House Speaker Newt Gingrich is pushing a bill to let credit 
     unions do what the court's ruling says the anachronistic 1934 
     law won't let them do.
       Meanwhile, in the state capitals where federally chartered 
     credit unions have been rechartering with state regulators, 
     the banks and credit unions will be slugging it out again on 
     membership rules and, in some states, on taxation issues.
       How these battles turn out will be an interesting test of 
     whether a broad interest favorable to lots of voters--the 
     credit unions--can defeat a powerful banking lobby that 
     provides lots of politicians with wads of campaign cash.
                                                                    ____


                    [From the Atlanta Constitution]

                       Keep Credit Unions Strong

       House Speaker Newt Gingrich (R-Ga.) has decided to join 
     some 160 cosponsors of a bill to strengthen credit unions, 
     adding important momentum to congressional efforts to 
     overturn a Supreme Court ruling favoring banks over financial 
     cooperatives.
       The bill embraced by Gingrich would allow federally 
     chartered credit unions to continue to include diverse groups 
     in their memberships. Last week, the Supreme Court ruled 5-4 
     that only a single group with a ``common bond'' can form a 
     credit union. In other words, a credit union would no longer 
     be allowed to welcome employees from several different 
     companies.
       That ruling could represent a significant financial setback 
     for the 62 million Americans who depend on the nonprofit 
     cooperatives for low-cost loans and other banking services. 
     The need for credit unions has grown as banks continue to 
     merge and enlarge themselves, leaving many consumers facing 
     higher fees and less personalized service.
       Because credit unions do not generate profits for 
     shareholders, they can pass along earnings to members in the 
     form of better rates and services. Although credit unions 
     make up less than 6 percent of the consumer financial-
     services market, they put enough pressure on banks to help 
     hold down fees for everyone.
       When credit unions were created by federal law in 1934, 
     members generally shared a ``common bond,'' such as 
     employment in a large factory. But in recent years, sprawling 
     factories have been closing, leaving more people employed by 
     small companies. In Georgia, for example, 62 percent of the 
     people employed in the private sector work for companies with 
     fewer than 500 employees.
       But a credit union needs at least 500 members to generate 
     sufficient business to cover costs. The only way to survive 
     is to have one union serve the employees of several small 
     companies, a move that the National Credit Union 
     Administration has allowed since 1982.
       Bankers sued the credit unions to stop that practice, 
     saying the 1934 law was being stretched too far. The Supreme 
     Court agreed that membership should be restricted under 
     existing law.
       Congress can ensure the continued health of credit unions 
     by updating the law to fit today's economy, with its 
     profusion of small businesses. Bankers oppose the bill, 
     saying credit unions have an unfair advantage because of 
     exemptions. But credit unions don't pay federal income taxes 
     because they don't generate income; they are simply groups of 
     people pooling funds to help one another.
       By allowing credit unions to continue to grow, Congress can 
     help the ``little guy'' combat rising bank fees, high loan 
     rates and occasionally rude service.
                                                                    ____


                 [From the Boston Globe, Mar. 2, 1998]

                          Where Credit Is Due

       Congress owes American consumers swift action to reverse 
     the effect of a Supreme Court decision potentially 
     restricting access to credit unions. Credit unions, beyond 
     providing direct services to ordinary savers and borrowers, 
     perform a valuable function for everyone with competitive 
     deposit and loan rates that would be diminished were the 
     decision's effects to stand for long.
       The court's 5-4 decision was based on a strict reading of 
     federal enabling statutes that govern eligibility for joining 
     credit unions. The law stipulates that credit unions may 
     serve groups of people with common bonds of association or 
     occupation, but regulators have permitted very loose 
     interpretation of what constitutes that commonality.
       This loose interpretation has, in turn, permitted growth of 
     credit unions that are essentially indistinguishable from 
     ordinary banks in their depositor and borrower customer 
     profiles.
       Despite expansion, credit unions are scarcely a dominant 
     force in banking, having only 6 percent of assets even though 
     the number of individual credit unions--11,591--slightly 
     exceeds the number of commercial and savings banks.
       The history of the credit union movement, in which 
     Massachusetts has played a leading role, dates to a time when 
     conventional banking practices were far less accommodating to 
     potential customers with limited means. Credit was often 
     difficult to get, and even depositors might be dismissed as 
     trivial nuisances. In that world, the development of credit 
     unions played an important role in providing financial 
     services to groups that might otherwise have been left out.
       More recently, credit unions have taken on the trappings of 
     conventional banks and have competed successfully with 
     savings banks and savings and loan associations. Too 
     successfully, some bankers say, blaming the tax advantages 
     some credit unions enjoy--an issue that also needs 
     addressing.
       For now Congress can avoid confusion and unnecessary 
     dislocation by authorizing what has become a financial 
     reality: Credit unions are significant and valued players in 
     a vital field.
                                                                    ____


                  [From the Startribune, Mar. 9, 1998]

            Credit Unions--Consumers Deserve Greater Access

       The American Bankers Association won a round against the 
     little guys last month when the U.S. Supreme Court ruled that 
     federal regulators have made it too easy for the nation's 
     credit unions to expand and compete with the Citibanks of the 
     world. You can't fault the justices; they read existing law 
     correctly.
       But this week, Congress will take up legislation to rewrite 
     the law and restore a broader customer base for credit 
     unions. That

[[Page E403]]

     would serve the nation's consumers and invigorate competition 
     in the nation's financial markets.
       At issue is a concept called ``field of membership.'' When 
     Congress created credit unions in 1934, it gave consumers the 
     power to band together and form low-cost alternatives to 
     banks. But Congress said such groups must have a common bond, 
     such as working for the same employer. In 1982 the federal 
     agency that regulates credit unions, the National Credit 
     Union Administration, greatly expanded that concept, allowing 
     a credit union to combine multiple employers or communities 
     within a field of membership. Today, about half of federally 
     chartered credit unions have these conglomerate memberships. 
     Some, like the IBM Employees Credit Union in Rochester, 
     Minn., have tens of thousands of members. It was this policy 
     that the Supreme Court struck down last month.
       But there was good reason for the NCUA to loosen the reins 
     on credit unions. The financial squeeze that swept across 
     America in the early 1980s restructured the U.S. economy, 
     wiping out many of the venerable mid-sized manufacturers that 
     had sustained credit unions. Meanwhile, a new industry of 
     micro-service firms sprang up, with the result that the 
     average size of American employers has shrunk and shrunk. 
     Today, fewer than half of Americans work at companies big 
     enough to sustain credit unions on their own. They simply 
     have no access to this attractive financial alternative.
       If credit unions posed a genuine threat to banks, it might 
     be right to go back to an older set of rules. But they don't. 
     Although they have some 70 million members, they represent 
     scarcely 2 percent of the financial services market--just 
     enough to serve as a good competitive check on banks in an 
     era of rapid financial consolidation.
       Bankers have a second gripe, which might get attention from 
     Congress. Credit unions are exempt from the federal corporate 
     income tax, and thus have a modest cost advantage over banks. 
     There is a rationale for this special tax status. Credit 
     unions are member-owned cooperatives that earn no profits and 
     have no stockholders. But modern credit unions resemble banks 
     in other important respects; they're professionally run and 
     highly computerized. It's hard to argue that they need what 
     amounts to a subsidy from taxpayers, especially at a time 
     when Congress is trying to squeeze loopholes out of the tax 
     code.
       Credit unions aren't for everybody. Many consumers want the 
     heft and convenience of a full-service bank that offers a 
     broad line of loans, multiple branches and even investment 
     advice. But credit unions, with volunteer management and no-
     frills infrastructure, typically offer basic checking and 
     lending services at more competitive fees and interest rates. 
     Choice is good in competitive markets, and this is a choice 
     that should be available to more Americans.
                                                                    ____


               [From the Chicago Tribune, Apr. 28, 1997]

   Consumers Will Be the Big Losers in Banks' Attack of Credit Unions

                           (By John McCarron)

       God bless the Navy Federal Credit Union.
       If it wasn't for the credit union, I couldn't have bought 
     that used Toyota Corona back in 1971. And if it wasn't for 
     that Toyota, things might not have turned out so well.
       Back then, my new bride needed a car so she could move out 
     of her parents' house in New Jersey and take a ``dream'' job 
     as a visiting nurse near Newport, R.I., where my oil tanker 
     was based. We were a year out of college with no savings and 
     a credit sheet full of outstanding student loans.
       That didn't bother the Navy Federal Credit Union. It was 
     used to lending money to freshly-minted ensigns with strange-
     sounding addresses like: ``USS Mississinewa (AO-144), FPO, 
     New York.'' And the office workers knew exactly where to find 
     the union's members. They also knew, what with so many 
     shipmates belonging to the same credit union, from the 
     captain to the cook, that for a junior officer to default on 
     a loan would be, well, not a good career move. More like a 
     keel-hauling offense.
       So NFCU okayed that thousand bucks by phone, right there at 
     the car dealership, and my new bride and I drove off to our 
     new careers, wedded bliss, kids, a mortgage and all the rest.
       Truth be told, we haven't borrowed much from our credit 
     union since those early years. Except for our mortgage we've 
     been fortunate enough to avoid buying-on-time or paying those 
     unconscionable 18 percent bank credit card rates. Still we're 
     faithful ``members-owners'' of the NFCU. I keep more than the 
     minimum balance in our ``share savings account'' for a couple 
     of reasons. You never know when you'll need a competitively-
     priced consumer loan; and besides, I believe in what credit 
     unions stand for.
       And what they stand for, to my way of thinking, is that 
     people of modest means have a right to form their own not-
     for-profit cooperatives rather than do business with for-
     profit companies owned by distant powers-that-be. That's also 
     why I choose to insure my house and car through a mutual 
     insurance company and why I got my first mortgage from a 
     savings and loan association. And it's why I was saddened 
     when my S&L was gobbled up--as so many have been--by a mega-
     bank that's listed on the New York Stock Exchange and pays 
     its CEO more than $3.6 million a year in salary and bonuses 
     (not including stock options.)
       Then again, most people don't care whether their lender or 
     insurer is mutual, co-op or stock. Likewise, most people 
     probably think Frank Capra's ``It's a Wonderful Life,'' was a 
     movie about Christmas, not the tension between mutuals 
     (George Bailey's S&L) and for-profits (Mr. Potter's 
     commercial bank.)
       Mr. Potter, you may recall, didn't have much use for the 
     dirty-fingernail types who financed their cottages through 
     their own S&L. So when the opportunity arose to pull the plug 
     on the little people (after Uncle Bailey misplaced a bank 
     payment) the greedy Mr. Potter moved in for the foreclosure 
     kill.
       Capra's populist allegory was heavy-handed, to be sure, the 
     product of Depression era angst over the lot of working 
     people. The movie's plot seems outdated now that so many of 
     us are middle-class with stock portfolios of our own.
       But guess what? The spirit of Mr. Potter is alive and well. 
     It throbs within the silk suits of American Bankers 
     Association, which is on a crusade to stop the growth of my 
     NFCU and the 12,000 other member-owned credit unions in these 
     United States.
       Turns out more and more consumers are discovering it pays 
     to save and borrow at their own co-ops rather than at banks 
     that need to churn out profits for stockholders and big 
     salaries for bank officers. Even though they hold 93 percent 
     of all the nation's savings, bankers say they are 
     ``concerned'' about the growth of credit union membership.
       So the ABA has been suing the federal agency that regulates 
     credit unions, claiming the unions ought to confine their 
     membership to savers with a single ``common bond'' (like 
     employment in the Navy.) In an era of rapid consolidation 
     among all types of lenders, they especially want to stop 
     larger credit unions from merging with smaller ones whose 
     members don't have the same bond.
       The bankers argue that overly permissive federal rules make 
     it possible for the general public to join credit unions. 
     This is an outrage, they say, because unlike banks, credit 
     unions don't pay income taxes and therefore have an unfair 
     competitive advantage. (An $800 million ``government 
     subsidy,'' according to ABA publicity materials.)
       What the bankers don't say is that credit unions disburse 
     virtually all their profits to members in the form of 
     dividends, which are, in turn, taxed as personal income.
       Maybe that last point was lost on the federal appellate 
     judges who last July overturned lower-court rulings and sided 
     with the banks. If the Supreme Court concurs, some 10 million 
     credit unionists will see their memberships voided.
       Unless, of course, Congress amends the 1934 Federal Credit 
     Union Act so as to liberalize the definition of ``common 
     bond.''
       Which is precisely what Congress should do, though I'm not 
     going to hold my breath. Money talks in Washington, and the 
     $5 trillion banking industry talks louder than a credit union 
     sector one-sixteenth that size.
       It's a shame, because I don't think Mr. Potter would have 
     made that loan on our used Toyota.