[Congressional Record Volume 144, Number 40 (Wednesday, April 1, 1998)]
[House]
[Pages H1868-H1885]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CREDIT UNION MEMBERSHIP ACCESS ACT
Mr. LEACH. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 1151) to amend the Federal Credit Union Act to clarify existing
law and ratify the longstanding policy of the National Credit Union
Administration Board with regard to field of membership of Federal
credit unions, as amended.
The Clerk read as follows:
H.R. 1151
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Credit Union Membership
Access Act''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The American credit union movement began as a
cooperative effort to serve the productive and provident
credit needs of individuals of modest means.
(2) Credit unions continue to fulfill this public purpose,
and current members and membership groups should not face
divestiture from the financial services institution of their
choice as a result of recent court action.
(3) To promote thrift and credit extension, a meaningful
affinity and bond among members, manifested by a commonality
of routine interaction, shared and related work experiences,
interests, or activities, or the maintenance of an otherwise
well-understood sense of cohesion or identity is essential to
the fulfillment of credit unions' public mission.
(4) Credit unions, unlike many other participants in the
financial services market, are exempt from Federal and most
State taxes because they are member-owned, democratically
operated, not-for-profit organizations generally managed by
volunteer boards of directors and because they have the
specified mission of meeting the credit and savings needs of
consumers, especially persons of modest means.
(5) Improved credit union safety and soundness provisions
will enhance the public benefit that citizens receive from
these cooperative financial services institutions.
TITLE I--CREDIT UNION MEMBERSHIP
SEC. 101. FIELDS OF MEMBERSHIP.
Section 109 of the Federal Credit Union Act (12 U.S.C.
1759) is amended--
(1) in the 1st sentence--
(A) by striking ``Federal credit union membership shall
consist of'' and inserting ``(a) In General.--Subject to
subsection (b), Federal credit union membership shall consist
of''; and
(B) by striking ``, except that'' and all that follows
through the period at the end of such sentence and inserting
a period; and
(2) by adding at the end the following new subsections:
``(b) Membership Field.--Subject to the other provisions of
this section, the membership of any Federal credit union
shall be limited to the membership described in 1 of the
following categories:
``(1) Single common-bond credit union.--1 group which has a
common bond of occupation or association.
``(2) Multiple common-bond credit union.--More than 1
group--
``(A) each of which has (within such group) a common bond
of occupation or association; and
``(B) the number of members of each of which (at the time
the group is first included within the field of membership of
a credit union described in this paragraph) does not exceed
any numerical limitation applicable under subsection (d).
[[Page H1869]]
``(3) Community credit union.--Persons or organizations
within a well-defined local community, neighborhood, or rural
district.
``(c) Grandfathered Members and Groups.--
``(1) In general.--Notwithstanding subsection (b)--
``(A) any person or organization who is a member of any
Federal credit union as of the date of the enactment of the
Credit Union Membership Access Act may remain a member of
such credit union after such date; and
``(B) a member of any group whose members constituted a
portion of the membership of any Federal credit union as of
such date of enactment shall continue to be eligible to
become a member of such credit union, by virtue of membership
in such group, after such date.
``(2) Successors.--If the common bond of any group referred
to in paragraph (1) is defined by any particular organization
or business entity, paragraph (1) shall continue to apply
with respect to any successor to such organization or entity.
``(d) Multiple Common-Bond Credit Union Group
Requirements.--
``(1) Numerical limitation.--Except as provided in
paragraph (2), only a group with fewer than 3,000 members
shall be eligible to be included in the field of membership
of a credit union described in subsection (b)(2).
``(2) Exceptions.--In the case of any Federal credit union
whose field of membership is determined under subsection
(b)(2), the numerical limitation described in paragraph (1)
shall not apply with respect to the following:
``(A) Certain larger groups incapable of supporting and
operating a single-group credit union.--Any group which the
Board determines, in writing and in accordance with the
guidelines and regulations described in paragraph (4), could
not feasibly or reasonably establish a new single common-bond
credit union described in subsection (b)(1) because--
``(i) the group lacks sufficient volunteer and other
resources to support the efficient and effective operation of
a credit union;
``(ii) the group does not meet the criteria which the Board
has determined to be important for the likelihood of success
in establishing and managing a new credit union, including
demographic characteristics, such as geographical location of
members, diversity of ages and income levels, and other
factors which may affect the financial viability and
stability of a credit union; or
``(iii) the group would be unlikely to operate a safe and
sound credit union.
``(B) Transactions for supervisory reasons.--Any group
transferred from another credit union--
``(i) in connection with a merger or consolidation which
has been recommended by the Board or any appropriate State
credit union supervisor for safety and soundness concerns
with respect to such other credit union; or
``(ii) by the Board in the Board's capacity as conservator
or liquidating agent with respect to such other credit union.
``(3) Exception for underserved areas.--Notwithstanding
subsection (b), in the case of a Federal credit union
described in paragraph (2) of such subsection, the Board may
allow the membership of the credit union to include any
person or organization within a local community,
neighborhood, or rural district if--
``(A) the Board determines that such local community,
neighborhood, or rural district--
``(i) meets the requirements of paragraph (3) and
subparagraphs (A) and (B) of paragraph (4) of section 233(b)
of the Bank Enterprise Act of 1991, and such additional
requirements as the Board may impose; and
``(ii) is underserved, based on data of the Board and the
Federal banking agencies (as defined in section 3 of the
Federal Deposit Insurance Act), by other depository
institutions (as defined in section 19(b)(1)(A) of the
Federal Reserve Act); and
``(B) the credit union establishes and maintains an office
or facility in such local community, neighborhood, or rural
district at which credit union services are available.
``(4) Regulations and guidelines.--The Board shall issue
guidelines or regulations, after notice and opportunity for
comment, setting forth the criteria the Board will apply in
determining whether or not an additional group may be
included within the field of membership of an existing credit
union pursuant to paragraph (2).
``(e) Additional Membership Eligibility Provisions.--
``(1) Membership eligibility limited to immediate family or
household members.--No individual shall be eligible for
membership in a credit union on the basis of the relationship
of such individual to another person who is eligible for
membership in such credit union unless the individual is a
member of the immediate family or household (as such terms
are defined by the Board by regulation) of such other person.
``(2) Retention of membership.--Except as provided in
section 118, once a person becomes a member of a credit union
in accordance with this title, such person or organization
may remain a member of such credit union until the person or
organization chooses to withdraw from the membership of the
credit union.''.
SEC. 102. CRITERIA FOR APPROVAL OF EXPANSION OF MEMBERSHIP OF
MULTIPLE COMMON-BOND CREDIT UNIONS.
Section 109 of the Federal Credit Union Act (12 U.S.C.
1759) is amended by inserting after subsection (e) (as added
by section 101 of this title) the following new subsection:
``(f) Criteria for Approval of Expansion of Multiple
Common-Bond Credit Unions.--
``(1) In General.--The Board shall--
``(A) encourage the formation of separately chartered
credit unions instead of approving an application to include
an additional group within the field of membership of an
existing credit union whenever practicable and consistent
with reasonable standards for the safe and sound operation of
the credit union; and
``(B) if the formation of a separate credit union by such
group is not practicable or consistent with such standards,
require the inclusion of such group in the field of
membership of a credit union which is within reasonable
proximity to the location of the group whenever practicable
and consistent with reasonable standards for the safe and
sound operation of the credit union.
``(2) Approval criteria.--The Board may not approve any
application by a Federal credit union described in subsection
(b)(2) to include any additional group within the field of
membership of such credit union (or an application by a
Federal credit union described in paragraph (1) to include an
additional group and become a credit union described in
paragraph (2)) unless the Board determines, in writing,
that--
``(A) such credit union has not engaged in any unsafe or
unsound practice (as defined in section 206(b)) which is
material during the 1-year period preceding the filing of the
application;
``(B) the credit union is adequately capitalized;
``(C) the credit union has the administrative capability to
serve the proposed membership group and the financial
resources to meet the need for additional staff and assets to
serve the new membership group;
``(D) pursuant to the most recent evaluation of such credit
union under section 215, the credit union is satisfactorily
providing affordable credit union services to all individuals
of modest means within the field of membership of such credit
union;
``(E) any potential harm the expansion of the field of
membership of the credit union may have on any other insured
credit union and its members is clearly outweighed in the
public interest by the probable beneficial effect of the
expansion in meeting the convenience and needs of the members
of the group proposed to be included in the field of
membership; and
``(F) the credit union has met such additional requirements
as the Board may prescribe in regulations.''.
SEC. 103. GEOGRAPHICAL GUIDELINES FOR COMMUNITY CREDIT
UNIONS.
Section 109 of the Federal Credit Union Act (12 U.S.C.
1759) is amended by inserting after subsection (f) (as added
by section 102 of this title) the following new subsection:
``(g) Regulations Required for Community Credit Unions.--
``(1) Definition of well-defined local community,
neighborhood, or rural district.--The Board shall prescribe
regulations defining the term `well-defined local community,
neighborhood, or rural district' for purposes of--
``(A) making any determination with regard to the field of
membership of a credit union described in subsection (b)(3);
and
``(B) establishing the criteria applicable with respect to
any such determination.
``(2) Scope of application.--Paragraph (1) shall apply with
respect to any application to form a new credit union, or to
alter or expand the field of membership of an existing credit
union, which is filed with the Board after the date of the
enactment of Credit Union Membership Access Act.''.
TITLE II--REGULATION OF CREDIT UNIONS
SEC. 201. FINANCIAL STATEMENT AND AUDIT REQUIREMENTS.
(a) In General.--Section 202(a)(6) of the Federal Credit
Union Act (12 U.S.C. 1782(a)(6)) is amended by adding at the
end the following new subparagraphs:
``(C) Accounting principles.--
``(i) In general.--Accounting principles applicable to
reports or statements required to be filed with the Board by
each insured credit union shall be uniform and consistent
with generally accepted accounting principles.
``(ii) Board determination.--If the Board determines that
the application of any generally accepted accounting
principle to any insured credit union is not appropriate, the
Board may prescribe an accounting principle for application
to such credit unions which is no less stringent than
generally accepted accounting principles.
``(iii) De minimus exception.--This subparagraph shall not
apply to any insured credit union the total assets of which
are less than $10,000,000 unless prescribed by the Board or
an appropriate State credit union supervisor.
``(D) Large credit union audit requirement.--Each insured
credit union which has total assets of $500,000,000 or more
shall have an annual independent audit of the financial
statement of the credit union performed in accordance with
generally accepted auditing standards by an independent
certified public accountant or public accountant licensed by
the appropriate State or jurisdiction to perform such
services.''.
(b) Technical and Conforming Amendment.--Section
202(a)(6)(B) of the Federal Credit Union Act (12
1786(b)(6)(B)) is amended by striking ``subparagraph (A)''
and inserting ``subparagraph (A) or (D)''.
[[Page H1870]]
SEC. 202. CONVERSIONS OF CREDIT UNIONS INTO OTHER DEPOSITORY
INSTITUTIONS.
(a) Review of Regulations Required.--The National Credit
Union Administration Board shall conduct a detailed review of
all regulations which govern or affect the conversion of a
credit union into any other form of depository institution,
including regulations relating to the form of disclosure
required preceding a vote by the members of a credit union
with regard to any such conversion and the manner in which
such vote shall be conducted, to ensure that such regulations
freely and fairly permit any such conversion after free,
fair, and objective disclosure to the members of the credit
union of the facts and issues involved in any such
conversion.
(b) Report to the Congress.--
(1) In general.--Before the end of the 12-month period
beginning on the date of the enactment of this Act, the
National Credit Union Administration Board shall submit a
detailed report on the findings and conclusions of the Board
in connection with the review required under subsection (a).
(2) Contents of report.--The report submitted pursuant to
paragraph (1) shall contain--
(A) any recommendation for any administrative or
legislative change which the Board may determine to be
appropriate with regard to any aspect of the conversion of a
credit union into another form of depository institution; and
(B) the justification for any recommendation of the Board--
(i) to retain in effect any provision of the regulations in
effect on March 13, 1998, which govern or affect the
conversion of a credit union into any other form of
depository institution; or
(ii) to amend or alter any such provision.
(c) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) Credit union.--The term ``credit union'' means any
Federal credit union or State credit union (as such terms are
defined in paragraphs (1) and (6), respectively, of section
101 of the Federal Credit Union Act).
(2) Depository institution.--The term ``depository
institution'' has the meaning given such term in section 3 of
the Federal Deposit Insurance Act.
SEC. 203. FREEZE ON BOARD REGULATIONS RELATING TO COMMERCIAL
LOANS AND CERTAIN APPRAISAL REQUIREMENTS
RELATING TO SUCH LOANS.
(a) In General.--The regulations of the National Credit
Union Administration Board which are codified in parts
701.21(h) and 722.3(a) of the Code of Federal Regulations, as
in effect on March 13, 1998 (relating to business loans and
lines of credit to members and appraisal requirements),
including any other regulations which are applicable with
respect to loans or lines of credit to which the part
applies, shall remain in effect without amendment or altered
application until the end of the 1-year period beginning on
such date and, notwithstanding the Federal Credit Union Act
or any other provision of law, any action of the National
Credit Union Administration Board, or the National Credit
Union Administration, on or after such date which purports to
amend (including an amendment by substitution) or otherwise
apply any such regulation differently than in effect on such
date shall have no force or legal effect before the end of
such 1-year period.
(b) Review and Report to the Congress.--Before the end of
the 1-year period described in subsection (a), the National
Credit Union Administration Board shall conduct a review of
the effectiveness of the regulations referred to in such
subsection as in effect on March 13, 1998, and shall submit a
report to the Congress on the results of such review before
the end of such 1-year period.
SEC. 204. SERVING PERSONS OF MODEST MEANS WITHIN THE FIELD OF
MEMBERSHIP OF CREDIT UNIONS.
(a) In General.--Title II of the Federal Credit Union Act
(12 U.S.C. 1781 et seq.) is amended by adding at the end the
following new section:
``SEC. 215. SERVING PERSONS OF MODEST MEANS WITHIN THE FIELD
OF MEMBERSHIP OF CREDIT UNIONS.
``(a) Continuing and Affirmative Obligation.--The purpose
of this section is to reaffirm that insured credit unions
have a continuing and affirmative obligation to meet the
financial services needs of persons of modest means
consistent with safe and sound operation.
``(b) Evaluation by the Board.--The Board shall, before the
end of the 12-month period beginning on the date of the
enactment of the Credit Union Membership Access Act--
``(1) prescribe criteria for periodically reviewing the
record of each insured credit union in providing affordable
credit union services to all individuals of modest means
(including low- and moderate-income individuals) within the
field of membership of such credit union; and
``(2) provide for making the results of such review
publicly available.
``(c) Additional Criteria for Community Credit Unions
Required.--The Board shall, by regulation--
``(1) prescribe additional criteria for annually evaluating
the record of any insured credit union which is organized to
serve a well-defined local community, neighborhood, or rural
district in meeting the credit needs and credit union service
needs of the entire field of membership of such credit union;
and
``(2) prescribe procedures for remedying the failure of any
insured credit union described in paragraph (1) to meet the
criteria established pursuant to such paragraph, including
the disapproval of any application by such credit union to
expand the field of membership of such credit union.
``(d) Emphasis on Performance, Not Paperwork.--In
evaluating any insured credit union under this section, the
Board shall--
``(1) focus on the actual performance of the insured credit
union; and
``(2) not impose burdensome paperwork or recordkeeping
requirements.''.
(b) Annual Reports.--With respect to each of the 1st 5
years which begin after the date of the enactment of this
Act, the National Credit Union Administration Board shall
include in the annual report to the Congress under section
102(d) of the Federal Credit Union Act a report on the
progress of the Board in implementing section 215 of such Act
(as added by subsection (a) of this section).
SEC. 205. NATIONAL CREDIT UNION ADMINISTRATION BOARD
MEMBERSHIP.
Section 102(b) of the Federal Credit Union Act (12
1752a(b)) is amended--
(1) by striking ``(b) The Board'' and inserting ``(b)
Membership and Appointment of Board.--
``(1) In general.--The Board''; and
(2) by adding at the end the following new paragraph:
``(2) Appointment criteria.--
``(A) Experience in financial services.--In considering
appointments to the Board under paragraph (1), the President
shall give consideration to individuals who, by virtue of
their education, training, or experience relating to a broad
range of financial services, financial services regulation,
or financial policy, are especially qualified to serve on the
Board.
``(B) Limit on appointment of credit union officers.--Not
more than 1 member of the Board may be appointed to the Board
from among individuals who, at the time of such appointment,
are, or have recently been, involved with any insured credit
union as a committee member, director, officer, employee, or
other institution-affiliated party.''.
SEC. 206. REPORT AND CONGRESSIONAL REVIEW REQUIREMENT FOR
CERTAIN REGULATIONS.
Any regulation prescribed by the National Credit Union
Administration Board defining, or amending the definition
of--
(1) the term ``immediate family or household'' for purposes
of subsection (e)(1) of section 109 of the Federal Credit
Union Act (as added by section 101 of this Act); or
(2) the term ``well-defined local community, neighborhood,
or rural district'' for purposes of subsection (g) of such
section (as added by section 103 of this Act),
shall be treated as a major rule for purposes of chapter 8 of
title 5, United States Code.
TITLE III--CAPITALIZATION AND NET WORTH OF CREDIT UNIONS
SEC. 301. PROMPT CORRECTIVE ACTION.
(a) In General.--Title II of the Federal Credit Union Act
(12 U.S.C. 1781 et seq.) is amended by inserting after
section 215 (as added by section 204 of this Act) the
following new section:
``SEC. 216. PROMPT CORRECTIVE ACTION
``(a) Resolving Problems to Protect Fund.--
``(1) Purpose.--The purpose of this section is to resolve
the problems of insured credit unions at the least possible
long-term loss to the National Credit Union Share Insurance
Fund.
``(2) Prompt corrective action required.--The Board shall
carry out the purpose of this section by taking prompt
corrective action to resolve the problems of insured credit
unions.
``(b) Regulations.--The Board shall implement subsection
(a) of this section by prescribing regulations, after public
notice and opportunity for comment, which--
``(1) establish criteria and procedures for classifying
credit unions as `well capitalized', `adequately
capitalized', `undercapitalized', `significantly
undercapitalized', or `critically undercapitalized';
``(2) specify a series of graduated regulatory enforcement
actions that may be imposed upon any credit union which fails
to meet the requirements for classification as an adequately
capitalized credit union, including--
``(A) the submission of net worth restoration plans;
``(B) earnings retention requirements;
``(C) prior written approval by the Board for certain
activities such as branching and entry into new lines of
business; and
``(D) the appointment of a conservator or liquidating agent
in appropriate circumstances;
``(3) establish reasonable net worth requirements,
including risk-based net worth requirements in the case of
complex credit unions, for various categories of credit
unions and prescribe the manner in which net worth is
calculated (for purposes of such requirements) with regard to
various types of investments, including investments in
corporate credit unions, taking into account the unique
nature and role of credit unions;
``(4) establish criteria for reclassifying the capital
classifications of credit unions that engage in unsafe or
unsound practices; and
``(5) are generally comparable with the prompt corrective
action provisions set forth in section 38 of the Federal
Deposit Insurance Act, taking into account the distinct
capital structure, cooperative nature, and other
characteristics of credit unions.''.
[[Page H1871]]
(b) Effective Date of Regulations.--
(1) Proposed regulations.--The National Credit Union
Administration Board shall publish, in the Federal Register,
proposed regulations which meet the requirements of the
amendment made by subsection (a) before the end of the 270-
day period beginning on the date of the enactment of this
Act.
(2) Final regulations.--The regulations required by the
amendment made by subsection (a) shall take effect in final
form by the end of the 18-month period beginning on the date
of the enactment of this Act.
(c) Report to Congress.--At the time the proposed prompt
corrective action regulations are published in the Federal
Register by the National Credit Union Administration Board
pursuant to subsection (b)(1), the Board shall submit a
report to the Congress on the differences and similarities
between such prompt corrective action regulations and the
regulations prescribed by the Federal bank agencies under
section 38 of the Federal Deposit Insurance Act.
SEC. 302. NATIONAL CREDIT UNION SHARE INSURANCE FUND EQUITY
RATIO, AVAILABLE ASSETS RATIO, AND STANDBY
PREMIUM CHARGE.
(a) In General.--Section 202 of the Federal Credit Union
Act (12 U.S.C. 1782) is amended--
(1) by amending subsection (b) to read as follows:
``(b) Certified Statement.--
``(1) Statement required.--
``(A) In general.--For each calendar year in the case of an
insured credit union with total assets of not more than
$50,000,000, and for each semi-annual period in the case of
an insured credit union with total assets of $50,000,000 or
more, an insured credit union shall file with the Board, at
such time as the Board prescribes, a certified statement
showing the total amount of insured shares in the credit
union at the close of the relevant period and both the amount
of its deposit or adjustment of deposit and the amount of the
insurance charge due to the fund for that period, both as
computed under subsection (c).
``(B) Exception for newly insured credit union.--
Subparagraph (A) shall not apply with respect to a credit
union that became insured during the reporting period.
``(2) Form.--The certified statements required to be filed
with the Board pursuant to this subsection shall be in such
form and shall set forth such supporting information as the
Board shall require.
``(3) Certification.--The president of the credit union or
any officer designated by the board of directors shall
certify, with respect to each such statement, that to the
best of his or her knowledge and belief the statement is
true, correct, complete, and in accordance with this title
and the regulations issued under this title.'';
(2) by amending clause (iii) of subsection (c)(1)(A) to
read as follows:
``(iii) Periodic adjustment.--The amount of each insured
credit union's deposit shall be adjusted as follows, in
accordance with procedures determined by the Board, to
reflect changes in the credit union's insured shares:
``(I) annually, in the case of an insured credit union with
total assets of not more than $50,000,000; and
``(II) semi-annually, in the case of an insured credit
union with total assets of $50,000,000 or more.'';
(3) by amending paragraphs (2) and (3) of subsection (c) to
read as follows:
``(2) Insurance premium charges.--
``(A) In general.--Each insured credit union shall, at such
times as the Board prescribes (but not more than twice in any
calendar year), pay to the fund a premium charge for
insurance in an amount stated as a percentage of insured
shares (which shall be the same for all insured credit
unions).
``(B) Relation of premium charge to equity ratio of fund.--
The Board may assess a premium charge only if--
``(i) the fund's equity ratio is less than 1.3 percent; and
``(ii) the premium charge does not exceed the amount
necessary to restore the equity ratio to 1.3 percent.
``(C) Premium charge required if equity ratio falls below
1.2 percent.--If the fund's equity ratio is less than 1.2
percent, the Board shall, subject to subparagraph (B), assess
a premium charge in such an amount as the Board determines to
be necessary to restore the equity ratio to, and maintain
that ratio at, 1.2 percent.
``(3) Distributions from fund required.--
``(A) In general.--The Board shall effect a pro rata
distribution to insured credit unions after each calendar
year if, as of the end of that calendar year--
``(i) any loans to the fund from the Federal Government,
and any interest on those loans, have been repaid;
``(ii) the fund's equity ratio exceeds the normal operating
level; and
``(iii) the fund's available assets ratio exceeds 1.0
percent.
``(B) Amount of distribution.--The Board shall distribute
under subparagraph (A) the maximum possible amount that--
``(i) does not reduce the fund's equity ratio below the
normal operating level; and
``(ii) does not reduce the fund's available assets ratio
below 1.0 percent.
``(C) Calculation based on certified statements.--In
calculating the fund's equity ratio and available assets
ratio for purposes of this paragraph, the Board shall
determine the aggregate amount of the insured shares in all
insured credit unions from insured credit unions certified
statements under subsection (b) for the final reporting
period of the calendar year referred to in subparagraph
(A).'';
(4) by adding at the end of subsection (c) the following
new paragraph:
``(4) Timeliness and accuracy of data.--In calculating the
available assets ratio and equity ratio of the fund, the
Board shall use the most current and accurate data reasonably
available.''; and
(5) by amending subsection (h) to read as follows:
``(h) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Available assets ratio.--The term `available assets
ratio', when applied to the fund, means the ratio of--
``(A) the amount determined by subtracting--
``(i) direct liabilities of the fund and contingent
liabilities for which no provision for losses has been made,
from
``(ii) the sum of cash and the market value of unencumbered
investments authorized under section 203(c), to
``(B) the aggregate amount of the insured shares in all
insured credit unions.
``(2) Equity ratio.--The term `equity ratio', when applied
to the fund, means the ratio of--
``(A) the amount of fund capitalization, including insured
credit unions' 1 percent capitalization deposits and the
fund's retained earnings balance (net of direct liabilities
of the fund and contingent liabilities for which no provision
for losses has been made), to
``(B) the aggregate amount of the insured shares in all
insured credit unions.
``(3) Insured shares.--The term `insured shares', when
applied to this section, includes share, share draft, share
certificate, and other similar accounts as determined by the
Board, but does not include amounts exceeding the insured
account limit set forth in section 207(c)(1).
``(4) Normal operating level.--The term `normal operating
level', when applied to the fund, means an equity ratio
specified by the Board, which shall be not less than 1.2
percent and not more than 1.5 percent.''.
(b) Effective Date.--This section shall become effective on
January 1 of the first calendar year beginning more than 180
days after the date of enactment of this Act.
SEC. 303. ACCESS TO LIQUIDITY.
Section 204 of the Federal Credit Union Act (12 U.S.C.
1784) is amended by adding at the end the following new
subsections:
``(f) Access to Liquidity.--The Board shall--
``(1) periodically assess the potential liquidity needs of
each insured credit union, and the options that the credit
union has available for meeting those needs; and
``(2) periodically assess the potential liquidity needs of
insured credit unions as a group, and the options that
insured credit unions have available for meeting those needs.
``(g) Sharing Information With Federal Reserve Banks.--The
Board shall, for the purpose of facilitating insured credit
unions' access to liquidity, make available to the Federal
reserve banks (subject to appropriate assurances of
confidentiality) information relevant to making advances to
such credit unions, including the Board's reports of
examination.''.
TITLE IV--MISCELLANEOUS PROVISIONS
SEC. 401. ASSURING INDEPENDENT DECISION MAKING IN CONNECTION
WITH CERTAIN CONVERSIONS.
Section 18 of the Federal Deposit Insurance Act (12 U.S.C.
1828) is amended by adding at the end the following new
subsection:
``(t) Conversions Involving Former Credit Unions.--
``(1) In general.--Notwithstanding any other provision of
law--
``(A) an insured credit union may not convert into an
insured depository institution; and
``(B) an insured depository institution which resulted from
a prior conversion of an insured credit union into such
insured depository institution may not convert from the
mutual form to the stock form and may not convert from 1 form
of depository institution into another,
unless the appropriate Federal banking agency for the insured
depository institution which results from any such conversion
reviews the conversion and determines that the requirements
of paragraphs (2) and (3) have been met.
``(2) Prohibition on economic benefit from conversion for
credit union officers, directors, and committee members.--An
individual who is or, at any time during the 5-year period
preceding any conversion described in paragraph (1), was a
director, committee member, or senior management official of
an insured credit union described in subparagraph (A) or (B)
of such paragraph (in connection with such conversion) may
not receive any economic benefit as a result of the
conversion with regard to the shares or interests of such
director, member, or officer in the former insured credit
union or in any resulting insured depository institution.
``(3) Acknowledgement and attestation by officers,
directors, and committee members.--Any insured credit union
or insured depository institution which is seeking to engage
in a conversion which is subject to this subsection shall
submit--
``(A) a written acknowledgement, in such form and manner as
the appropriate Federal banking agency may prescribe, by
every individual who is subject to the prohibition
[[Page H1872]]
contained in paragraph (2), that such individual is aware of
such prohibition; and
``(B) an attestation that the conversion under review will
not result in a violation of such prohibition.
``(4) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Insured credit union.--The term `insured credit
union' has the meaning given to such term in section 101(7)
of the Federal Credit Union Act.
``(B) Senior management official.--The term `senior
management official' means a chief executive officer, an
assistant chief executive officer, a chief financial officer,
and any other senior executive officer (as defined by the
appropriate Federal banking agency pursuant to section
32(f)).''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Iowa (Mr. Leach) and the gentleman from New York (Mr. LaFalce) each
will control 20 minutes.
The Chair recognizes the gentleman from Iowa (Mr. Leach).
Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
(Mr. Leach asked and was given permission to revise and extend his
remarks.)
Mr. LEACH. Mr. Speaker, the House today takes up H.R. 1151, the
Credit Union Membership Access Act, which the Committee on Banking and
Financial Services approved by unanimous voice vote last Thursday.
The bill is before us today as a result of a ruling by the Supreme
Court on February 25, holding that the National Credit Union
Administration had improperly interpreted its 1934 act in allowing for
mergers between credit unions with different common bonds.
Last year, at the time the Court took the case, there were those who
advocated congressional action. My view, and that of many others, was
that it would have been inappropriate for Congress to act while the
case was pending before the Court. However, I made it clear to all
affected parties that I was committed to prompt hearings and action if
necessary to ensure that no Americans would be kicked out of the
financial institution of their choice.
Mr. Speaker, we have moved quickly for a deliberative legislative
body. Within two weeks of the Supreme Court ruling, the Committee on
Banking and Financial Services had a comprehensive hearing on the
subject. Two weeks later we marked up a bill, and now it is being
brought to the floor.
Credit unions represent democracy at work in the marketplace, and
this legislation will go a long way towards ensuring they remain an
integral part of the American way of life.
The legislation before us first and foremost provides for
grandfathering all current common bond arrangements and all current
credit union members. It ensures the continued safety and soundness of
credit unions by permitting certain multiple common bond formations in
the future.
H.R. 1151 would allow any credit union members jeopardized by the
court ruling to retain their membership. It would allow credit unions
to accept members from an unrelated group as long as the members from
the group do not exceed 3,000. Groups that joined would also have to be
located within a reasonable proximity of the credit union itself.
The bill would require the Credit Union Administration to move to
more specifically define who could join a credit union, based on their
status as a member's immediate family or household or living in a
certain geographic area.
The bill would extend for one year current regulations that allow
credit unions to make commercial loans.
The bill would require credit unions to serve members of modest
means, and require the Credit Union Administration to set up criteria
for periodically reviewing credit unions' lending records to ensure
compliance with this provision. This provision is similar to the
requirements of the 1977 Community Reinvestment Act which applies to
the banking industry.
The bill would also require that the Credit Union Administration
promulgate regulations that would apply capital requirements to credit
unions to ensure safety and soundness. Such requirements deal with such
items as reserves and collateral now applied to banks.
The bill would allow the Credit Union Administration to increase the
funds that credit unions must pay to the National Credit Union
Insurance Fund, a Federal fund that insures deposits and makes credit
unions safe for the public.
Finally, I would like to draw Members' attention to a provision I
authored which is designed to protect credit union members in the event
a credit union changes to a stock charter. In the S&L industry in
recent years, insiders who controlled mutual associations reaped large
profits when they changed to a stock structure. Under this bill, in the
event any credit union changes its structure, the benefits of the
credit union will go to the membership rather than insiders.
Mr. Speaker, I ask for Members' support for this bill, and would like
to recognize important contributions in its crafting by the gentleman
from New York (Mr. LaFalce), the distinguished ranking member of the
committee, as well as that of the gentlewoman from New Jersey (Mrs.
Roukema) and the gentleman from Minnesota (Mr. Vento), the chair and
ranking member of the Subcommittee on Financial Institutions and
Consumer Credit.
{time} 1230
In addition to the original cosponsors of H.R. 1151, the gentleman
from Ohio (Mr. LaTourette) and the gentleman from Pennsylvania (Mr.
Kanjorski) made extraordinary contributions to the legislation before
us. I thank all of them and their respective staffs for working days,
evenings and weekends in order to bring this to the floor on a timely
basis.
Mr. Speaker, I reserve the balance of my time.
(Mr. LaFalce asked and was given permission to revise and extend his
remarks.)
Mr. LaFALCE. Mr. Speaker, I yield myself 2 minutes.
I strongly support the bill that is before us today. The bill will
preserve and promote the future viability of federally chartered credit
unions. This bill is an imperative. It must be passed today. It must be
passed in the Senate as soon as possible and signed into law by the
President.
The reason we are at the point we are today in large part is because
of the outstanding work of the chairman of the committee, the gentleman
from Iowa (Mr. Leach). The gentleman from Iowa (Mr. Leach) made the
decision to proceed in not a bipartisan, but a nonpartisan way and that
is the way it has been on this bill from the day of the Supreme Court
decision. There has been a totally cooperative, collegial approach, not
only between the chairman and myself, but between the Republican side
of the aisle and the Democratic side of the aisle, their excellent
staff and our excellent staff working jointly.
We have produced a good bill, a bill that can be supported by every
one, a bill that can be supported by the administration and a bill that
will be a clear winner, a winner for credit unions and credit union
members, yes. A winner for banks also, because it closes down on some
inappropriate practices that, to a certain extent, existed and could
exist under previous law. Those have been closed down, tightened up.
Most importantly, it is a clear winner for the American consumer. It
promotes safety and soundness, and it gives the consumer the option of
going to a credit union, a thrift, a bank, whatever the consumer might
want. And it maintains the concept of the credit union as we have known
it.
My thanks to every one, especially the chairman, the staff of both
the Republican and Democratic side and my colleagues, the gentleman
from Minnesota (Mr. Vento), the gentlewoman from New Jersey (Mrs.
Roukema), the gentleman from Pennsylvania (Mr. Kanjorski), and the
gentleman from Ohio (Mr. LaTourette) and so many others. I would love
to proceed on every single bill before our committee in the manner that
we proceeded on this one.
Mr. LEACH. Mr. Speaker, I yield 3 minutes to the gentlewoman from New
Jersey (Mrs. Roukema), who played such a critical role in the
development of this approach.
Mrs. ROUKEMA. Mr. Speaker, I thank Chairman Leach for yielding me the
time. I want to commend him for his profound and extraordinary
leadership on what could have been an extraordinarily controversial
issue here and certainly express my appreciation to the ranking members
Representatives LaFalce and Vento.
[[Page H1873]]
Members have already heard outlined the fact that we are profoundly
and promptly responding to the Supreme Court decision and really
exercising in a proper way the separation of powers between the
judiciary and the Congress. We are exercising our statutory authority
here. I do support it.
I would like to make three other short points. First, obviously we
have promptly acted on the Supreme Court's decision, and I think we
have done it in time so that we can avoid other court decisions that
might further complicate the problem. So we have resolved that
statutory responsibility.
Secondly, we are protecting hard-working savers and consumers, the 20
million credit union Members that are really innocent of this problem
as it was created, but they deserve to be grandfathered and protected
and that is done under this bill.
Thirdly, and perhaps most importantly for our Members who are
conflicted about the different special interest groups here and the
perhaps imprecise information that they have been given, we are putting
in place many of the Treasury Department's recommendations on safety
and soundness. That is important, of primary importance to our
committee. Credit unions will have bank-like capital and net worth
requirements in this bill. Large credit unions are required to have
annual audits by licensed CPAs. I agree with the complete explanation
the Chairman presented, on that provision. These and other new
requirements will assure that credit unions are financially safe, in
the years to come and not be a threat to the taxpayer.
Mr. Speaker, I think we can take some pride in what is done here. It
does not mean that I would not have made some tighter restrictions on
the multiple common bonds. I would have. But I think what we have to
understand is that there are stricter, there are tighter restrictions
on the growth of these common bonds, really restrictions that can be
held to tight legal requirements as far as I am concerned. But the
important thing here is that we have reached a consensus. We have found
common ground here. I think we have balanced properly good public
policy with what is the need for continuing credit union life. I think
that is important.
I would also note that in terms of putting requirements on the
multiple common bond credit unions, we did put geographic limitations
on the expansion and we have seen in the local preference provisions in
section 102 of the bill that it is extremely important, the local
preference positions.
Again, I think we have struck the right balance between good public
policy and given the proper and timely legislative response to the
Supreme Court dictate.
I commend this to my colleagues for approval, and ask that the
language of the Committee report (as attached) be included in this
debate.
The Committee does not intend for this numerical limitation
to be interpreted as permitting all groups with 3,000 or
fewer members to be included within the field of membership
of an existing credit union. The 3,000 member limitation is
intended as the maximum size of groups that can organize
within an existing credit union, unless a group meets
specific exemptions. The Board is required, under Section 102
of the bill, to encourage common bond groups, regardless of
size, to organize new separately chartered credit unions. The
NCUA must determine that a group has sufficient financial and
operational resources to form a separate credit union and to
operate it in a safe and sound manner.
There are two exceptions to the 3,000 member limit. First,
the NCUA may permit groups with over 3,000 members to join an
existing credit union if the Board determines in writing that
the group does not have the financial resources or
operational capacity to organize and operate a new single
common bond credit union. Second, the Board may merge or
consolidate a group with over 3,000 members with another
credit union for supervisory reasons. The Committee does not
intend for these exceptions to provide broad discretion to
the Board to permit larger groups to be incorporated within
or merged with other credit unions. The exceptions are
intended to apply where the Board has sufficient evidence to
support a finding that creation of a separately chartered
credit union, or the continued operation of an existing
credit union, present safety and soundness concerns.
There is also an exception in this section for underserved
areas. Any person or organization within an underserved local
community, neighborhood, or rural district may be added to
multiple common bond credit unions which establishes and
maintains an office or facility in the underserved areas. The
term ``facility'' in the Act is meant to be defined in the
same way that the National Credit Union Administration
(``NCUA'' or ``Board'') has defined ``service facility,''
that is, an automatic teller machine or similar device would
not qualify. The section also requires the NCUA to issue
regulations, with notice and comment, establishing criteria
that will be applied when determining whether additional
groups may be added under this section.
Under this section, multiple common bond credit unions are
required to apply to the NCUA every time they want to add a
new group to their field of membership, regardless of the
size of the group to be added. The NCUA must determine in
writing that the six specific approval criteria have been
met. This NCUA determination is a final agency action.
Specifically, the Board must find that the credit union has
not engaged in material unsafe or unsound practices during
the year prior to the application; the credit union is
adequately capitalized; it has the administrative capability
to serve the proposed membership group and the financial
resources to meet the need for additional staff and assets to
serve the new group. Additionally, in accordance with section
215 of the Federal Credit Union Act, the Board must determine
that the credit union is satisfactorily providing credit
union services to all individuals of modest means within its
field of membership; and that any potential harm to another
insured credit union and its members from the credit union's
expansion is clearly outweighed by the probable beneficial
effect of the expansion in meeting the convenience and needs
of the members of the group proposed to be included. The
credit union must also meet any other requirements the Board
has prescribed.
The Committee specifically notes the approval criteria in
subparagraph (E) which related to potential harm to other
insured credit unions. As noted above, the Committee strongly
favors placing groups with local credit unions. However, it
is not intended that this requirement be implemented in a
manner that causes significant injury to other local credit
unions in terms of creating overlapping memberships that may
weaken the membership or financial base of an existing credit
union. The Board is expected to establish procedures to
minimize the potential harm to other insured credit unions
wherever possible and, at a minimum, to ensure that any
potential harm to an existing credit unions is clearly
outweighed by the benefits created by the membership
expansion in terms of additional services and convenience for
the new member group.
SECTION 103. GEOGRAPHICAL GUIDELINES FOR COMMUNITY CREDIT
UNIONS.
Section 103 requires the Board to define by regulation the
criteria it will use in determining the meaning of the term
``well defined local community, neighborhood, or rural
district'' for purposes of evaluating charter applications by
community credit unions. These terms shall only apply to
applications for new credit unions and applications to alter
the membership of existing credit unions submitted after the
date of enactment.
Mr. LaFALCE. Mr. Speaker, I yield such time as he may consume to the
gentleman from Maine (Mr. Baldacci).
(Mr. BALDACCI asked and was given permission to revise and extend his
remarks.)
Mr. BALDACCI. Mr. Speaker, I rise in support of H.R. 1151.
I rise today in support of HR 1151, the Credit Union Membership
Access Act. In light of the Supreme Court's decision, it is important
that we take action to clarify the status of credit unions and their
members.
Credit unions--along with banks large and small--are an important
part of our Nation's financial fabric. People want to--and should be
able to--choose the financial institution with which they will do
business. Banks, community banks, and credit unions each provide
valuable services in Maine. We need to make sure that a healthy
competition exists which will ultimately benefit the people of Maine.
At the same time, I am disappointed that this legislation has come to
the Floor under Suspension of the Rules. This procedure means that
there is no opportunity to fully debate this subject, or to offer
amendments to the bill. Specifically, I would have liked the
opportunity to debate many of the Treasury Department's recommendations
and capital requirements which were not included in this bill.
Credit unions play a critical role in our financial markets, and it
is absolutely necessary that strong safety, soundness and capital
measures be adopted to ensure their viability well into the next
century.
Again, I support this legislation. However, I would urge my
colleagues on the Banking Committee to take these issues into
consideration should this matter go into conference.
Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the gentleman from
Minnesota (Mr. Vento), distinguished ranking member of the Subcommittee
on Financial Institutions and Consumer Credit.
Mr. VENTO. Mr. Speaker, I thank the gentleman for yielding me this
time.
I commend the chairman and ranking member, the subcommittee chair,
the
[[Page H1874]]
gentlewoman from New Jersey (Mrs. Roukema) and others, the gentleman
from Pennsylvania (Mr. Kanjorski), and the gentleman from Ohio (Mr.
LaTourette), for their work in terms of bringing and shaping the
package that we have before us. I think this is a bill that the Members
should overwhelmingly record their vote in support of.
The fact is that this remedies the court decision of about a month
ago that had been a long time considered by the courts in terms of the
field of membership for credit unions. The definitions in the law
really have not been substantively adjusted since 1934. After some over
60 years, it is appropriate to recognize in the law the changing
complexion of our society and our economy and the nature of mergers,
acquisitions and divestiture that often has occurred with regard to
various employee and other association groups that had been organized
as credit unions. It is only common sense to recognize that this
evolution would cause and eclipse the 1934 law upon which credit unions
rely for the base of membership.
This importantly not just remedies the Supreme Court case, but sets a
policy path and guidance for the future by strengthening the
definitions of such groupings and probably averting future court cases
that have recently been rendered by the Supreme Court. It greatly
strengthens, this bill strengthens the Credit Union Administration. It
provides additional safety and soundness, and it very importantly
provides a social responsibility. The reason that we, of course, have
financial institutions, including banks, credit unions and thrifts and
others, is, of course, to serve the people we represent.
Some 20 years ago we set in place something called the Community
Reinvestment Act. This puts in place the Community Reinvestment Act
that fits and is tailored to the needs of the credit union. I urge
Members to support and record their vote in favor of this measure.
Mr. Speaker, I rise in support of this urgently needed legislation
for current credit unions and their members who have been jeopardized
by the Supreme Court's decision in February. This bill will protect the
ten to twenty million credit union members that could be affected by
that ruling. H.R. 1151 as reported by the Banking Committee last week
will also assist future credit unions and their members by providing
additional statutory direction that can immunize the credit union
industry from future law suits.
As Members know, this legislative compromise came together through
the work of a bipartisan working group that sorted through the various
issues to present to the Banking Committee. I want to thank Chairman
Leach who brought me, Mr. LaFalce, Mr. Kanjorski and Members from the
other side of the aisle together over the past month to forge this
measure. The Banking Committee perfected this bill and we have brought
the House a sound and solid compromise. We took input and advice from
the interest parties, the credit unions, the banks, and the good
legislative initiatives of our colleagues. The work of Mr. Kanjorski,
Mr. LaTourette, Mr. LaFalce, Mr. Barrett, Mr. Kennedy, Mr. Frost, Mr.
Baker, Mr. Ehrlich and others is reflected in this bill before the
House today.
Mr. Speaker, we need to modernize the credit union field of
membership definitions which do not fit the socio-economic reality of
the 1990's. The merger/divestiture phenomena of corporate America has
changed the landscape and has had an unusual and special effect upon
credit unions bound by the ``common bond'' and ``field of membership''
law. This has conversely forced divestitures, mergers or closings of
credit unions. Federal credit union law needs to accommodate and
respond to this reality. Credit union law needs to be modernized,
addressing the membership base of credit unions because they would not
be able to sustain a membership base and reasonable services under the
strict interpretation of a 1934 federal credit union law.
By creating a new mechanism for adding so-called select employee
groups, basically allowing multiple common-bond credit unions, we are
revamping and facilitating the federal credit union law and empowering
credit unions to adapt to the 1990's market place. The bill provides
clear direction to the National Credit Union Administration (NCUA)
including a 3,000 field of membership guideline and a reasonable
proximity test. It also affords the regulator with flexibility to
accommodate groups that may not meet this test but that would find it
difficult to form a single-bond credit union of their own.
H.R. 1151 now has a Community Reinvestment Act-like test that I am
optimistic credit unions can met. This policy and requirement will
benefit our communities and economy. Credit unions can and should meet
the needs of credit union members of modest means. I have urged credit
unions to accept this responsibility and now I would encourage the NCUA
in implementing this new CRA-like test to emphasize performance and
results not paperwork. I expect that the NCUA will review and draw from
the good work of other financial institutions regulators who in the
last few years have revamped CRA to do just that.
We have strengthened the regulatory foundation of credit unions, the
regulators and the NCUA insurance fund by adding capital and net worth
requirements to be established by the National Credit Union
Administration based on the guidance in this legislation. The NCUA will
be empowered with prompt corrective action powers, substantially
similar to those that have been established to govern the banks and
thrifts. We have reinforced the share insurance fund mandating the
retention of funds. Independent audits will be required for today's
very large credit unions with assets in excess of $500 million.
H.R. 1151 also keeps the data flowing on member business loans and
mandates special credit union qualifications for activities,
maintaining a $50,000 threshold for reporting and other requirements.
It does not, however, place any additional restrictions on the size or
quantity of personal loans for a business purpose that a credit union
can make to its members. The report called for in this measure will
provide the information needed to better understand member business
loans so that any action would be based on facts that justify the
action.
Mr. Speaker, we need to pass this bill today so that this corrective
legislation with regards to credit unions will move forward
expeditiously in the Senate and make its way to the President as soon
as possible. Credit unions have been faced by the same competitive
pressures, changing technology, and the evolution in products and
services that other financial institutions are facing. In order to meet
the challenges of the 21st Century, credit union law, regulation and
operation must modernize and grow responsibly. I urge my Colleagues to
support H.R. 1151, the Credit Union Membership Access Act.
Mr. LEACH. Mr. Speaker, I yield 5 minutes to the gentleman from Ohio
(Mr. LaTOURETTE), original author of this legislation, a very committed
and distinguished Member.
(Mr. LaTOURETTE asked and was given permission to revise and extend
his remarks.)
Mr. LaTOURETTE. Mr. Speaker, I thank the chairman very much for
yielding time to me.
Mr. Speaker, this is a wonderful day for the 70 million Americans who
belong to credit unions, including the 2.8 million members in my home
State of Ohio. When the gentleman from Pennsylvania (Mr. Kanjorski) and
I began this journey a little over a year ago, I do not think we could
have imagined that our simple 6-line bill designed to update a 1934
depression era statute would grow to over 30 pages and enjoy 200
cosponsors in the House, including the Speaker of the House, the
gentleman from Georgia (Mr. Gingrich).
The evolution of this legislation has everything to do with the
strong grass roots campaign by the members of America's credit unions
and the willingness of leadership on both sides of the Committee on
Banking and Financial Services to work with the issue and develop a
compromise that takes into account the concerns of many Members and
many interests.
I especially want to thank and recognize the efforts of the gentleman
from Iowa (Mr. Leach), the gentleman from New York (Mr. LaFalce), the
gentlewoman from New Jersey (Mrs. Roukema) and the gentleman from
Minnesota (Mr. Vento). Without their involvement following the Supreme
Court decision and their willingness to work long hours and to talk
through these issues, we would not be on the floor today.
I also want to make an observation that working with a member from
the other side of the aisle, as I have had a chance to do with the
gentleman from Pennsylvania (Mr. Kanjorski) for the last year, is
something that I would recommend to all my friends. This experience has
given me the chance to realize what a fine man and representative the
gentleman from Pennsylvania (Mr. Kanjorski) is and how lucky his
constituents in Pennsylvania are that they have him representing their
interests in the House.
This effort would also not have been possible without the support and
encouragement of Speaker Gingrich.
[[Page H1875]]
Quite frankly, his cosponsorship of this bill greatly accelerated its
pace and jump started the support of many Members. His willingness to
be out front on this issue should be applauded.
Mr. Speaker, why is it important for credit unions to be allowed to
expand as they have for the last 16 years? The need was certainly
illustrated to me in a letter that I received from a constituent, Betty
Yelochen of Mayfield Village. Ms. Yelochen has been a member of Clark
General Federal Credit Union for over 40 years and has worked as its
manager the last 19 years.
She writes about her credit union:
Our original sponsor company, Clark Controller Co., went
out of business a number of years ago. In order to survive,
the credit union took in a number of mergers. When the policy
was adopted in 1982 permitting multiple groups, we took in a
number of smaller companies that couldn't support a credit
union on their own. Our credit union is small, only $1.7
million in assets and approximately 1,300 members. All of my
financing has been handled by our credit union. Clark General
Federal Credit Union offers personalized service with minimal
fees.
It is as simple as this, Mr. Speaker. As Members have died, they have
been replaced by Members from small companies, some of which join in
increments of as few as four employees at a time. Additionally, in the
16 years following the relaxation of membership rules, Clark General
Federal Credit has taken in a few smaller companies and credit unions
including the Curtis Employees Credit Union of Eastlake, Ohio, which
was on the brink of collapse after a protracted labor strike by Curtis
employees.
About 230 Curtis employees now belong to Clark General. Most members
of Clark General Credit Union are elderly and have been members for 40
years or more. Betty Yelochen says it is kind of like home. It is run
on a shoestring, and we are so reserved it is unreal. Still even this
small credit union wants to remain viable, and to do so it has to be
able to add new members and new services which H.R. 1151 permits it to
do.
It is important to note that this credit union has no aspirations of
offering home mortgages or even second mortgages. Heck, they would be
thrilled if they could just have a drive-through window or an ATM
machine. This particular credit union exists largely because of its
low-cost loans that it can provide to members and its low delinquency
rate. It is doing the same things well today that it did for 50 years.
Mr. Speaker, H.R. 1151 ensures credit union access to America's
millions and millions of small businesses. This hard-working,
prosperous and inventive work force will now have the ability to choose
where they can conduct their financial dealings. Had the Congress let
the Supreme Court ruling stand and prevented new employee groups, each
with its own common bond, from joining credit unions, we would have
been harming a huge chunk of America's work force.
Remember, Mr. Speaker, our country's 22 million small businesses
employ more than 50 percent of the private work force, generate more
than half of the Nation's gross domestic product, and are the principle
source of new jobs. When President Clinton announced plans to reinvent
the Federal Government he indicated the goal was ``customer service
equal to the best in business.''
Mr. Speaker, many credit union members believe this is precisely what
they get today from their credit union, the best customer service in
the business.
Mr. Speaker, H.R. 1151 should not be considered pro credit union or
antibank. Instead, it should be viewed as it was intended, pro consumer
and pro competition, both of which are good things. I urge Members to
pass this bill.
Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Pennsylvania (Mr. Kanjorski), primary Democratic author
of the original version of H.R. 1151, and certainly the primary
promoter of a cure for the problem created by the Supreme Court
decision.
{time} 1245
Mr. KANJORSKI. Mr. Speaker, this is a great day for the House of
Representatives. I just want to take a moment because I am one of the
Members that have had the opportunity to serve in this House not only
as a Member of Congress but as a page. So my history goes back to the
83rd Congress, and I have watched so many great and fine people come
through this tradition and this institution and go on to our highest
office.
But today is a fine day; and our former friend and colleague, Bill
Emerson, would have been pleased to be here today because he had the
same intuition as I have about this fine institution.
We had a problem yesterday with the attachment, and we saw the
chairman of the Committee on Rules take appropriate and good action in
the best spirit of bipartisanship. We saw the chairman of the Committee
on Banking and Financial Services reach out and create a task force to
work on this bill. We have seen the ranking member of the full
committee and the ranking member of the subcommittee on our side go
through extra efforts to make certain that the task force was made up
of all people and all issues and interest groups in the committee.
We took it through the process of the committee. And although this is
a contentious issue and was in the beginning because some people felt
there had to be winners and losers, as my friend, and now he is my
friend, the gentleman from Ohio (Mr. LaTourette), just said, there are
not any winners and losers here; it is just good, solid legislation by
a House of Representatives that on April 1, April Fools Day, are going
to prove they are not fools, that they are real legislators on both
sides of the aisle. This is one of our finest hours, in my opinion.
What this bill covers, we have heard all the discussion. It stops
bleeding that would have killed the credit union movement in this
country. It creates a framework under which they can exist and continue
to grow and serve their membership and serve America. It does not
unfairly compete with other financial institutions in our system but
allows consumers free choice and protection.
Most importantly, it reaches out to the new jobs and new businesses
of small business that they, too, could be credit union members. It
does for 70 million Americans something that, if this action were not
taken today, would have been a death knell for their interests and
their movement.
It has 207 bipartisan sponsors on the Republican side of the aisle,
on the Democratic side of the aisle. It has brought together the
support of consumers groups across America, the Consumer Federation of
America and Consumers Union. It will maintain the existence and growth
of the credit union movement and will not unduly interfere with the
banks in any way.
Mr. Speaker, in the spirit of bipartisanship today, I want to thank
everybody that has taken part, particularly my new and great friend,
the gentleman from Ohio (Mr. LaTourette), for this year comes to an end
when we can send through the House of Representatives one of our most
responsible financial services legislation, send it on to the Senate
with the finest recommendation, and recommend to the President of the
United States that he signs into law this resolution as soon as
possible.
Mr. LEACH. Mr. Speaker, I yield 2 minutes to the gentleman from New
York (Mr. Solomon), the distinguished chairman of the Committee on
Rules, who has been a staunch and consistent supporter of the credit
union movement.
Mr. SOLOMON. Mr. Speaker, rising in support of this legislation, let
me heap praise on the sponsor, the gentleman from Ohio (Mr.
LaTourette), for his counsel in introducing and dragging and pulling
this legislation to the floor today. Many people in the very beginning
said it could not be done, and my colleague did it with perseverance.
And I commend the gentleman from Iowa (Mr. Leach), chairman of the
committee, and, of course, my good friend, the gentleman from
Pennsylvania (Mr. Kanjorski), because they also were strong supporters
of this legislation.
From the very beginning, Mr. Speaker, I always believed that a nation
in the private sector and government at all levels must do all they can
to encourage increased savings by the American people; and credit
unions are a viable, dependable, and stable financial group that
contribute so much to the
[[Page H1876]]
economy, the health of our country and its people in making it easier
for the American people to save and invest. And that is what keeps this
economy chugging along.
Credit unions are oriented to people rather than profits. We should
always keep that in mind. The average credit union is small, just $23
million in assets, less than a tenth the size of the average bank. That
is less than the single largest U.S. bank, all of the credit unions
together, less than the single largest U.S. banking company.
Mr. Speaker, this is a battle between rich bankers and working
Americans. America's banking institutions are waging a war against
credit unions, and let us not ever forget it, and let us not cover it
up on this floor. These banks want credit unions out, including my good
friends, the bankers in Glens Falls, New York.
Both in court and in Congress, banks are trying to stamp out credit
union competition and deny millions of American consumers access to
affordable credit union financial services. This bill addresses the
critically important question of credit union membership, which has
already been outlined by the gentleman that spoke before me.
Mr. Speaker, in my congressional district in upstate New York, there
are 200,000 credit union members; and there are an average of 163,000
credit union members in every congressional district in America.
Mr. Speaker, credit union members are so worried about this
legislation because they are the owners themselves; and that is why
they are there, to serve the people.
I thank the gentleman for yielding me the time. Let us pass this
legislation and get it over to the Senate.
Mr. LaFALCE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from Michigan (Mr. Bonior), the distinguished Democratic Whip.
Mr. BONIOR. Mr. Speaker, the word ``love'' I reserve for very special
occasions. I love my wife. I love my children. I love my family. I love
my colleagues. But I am here this afternoon to say that I love my
credit union.
And the reason I love my credit union is because, of all the
financial institutions or all the business institutions that I have had
to deal with in my life, the credit union has provided me with the best
service at the fairest rate within the sense of community. And the
reason it will do so well on this floor today is because it provides
that kind of service.
I got my washing machine, my dryer, my car, my kids' education all
from my credit union. And they did it with style, they will did it with
grace, they did it with good rates, and they did it within the sense of
community, as I said.
I want to commend my colleagues, the gentleman from New York (Mr.
LaFalce), the gentleman from Iowa (Mr. Leach), the gentleman from Ohio
(Mr. LaTourette), and the gentleman from Pennsylvania (Mr. Kanjorski),
for taking the lead on this.
This is a very good bill. It is a responsible bill. It has updated
the law that relates to credit unions, which has not been updated for
almost 50 years now; and it does it in a way that will allow credit
unions to continue to grow and will not jeopardize the 70 million
members who would be jeopardized by the Supreme Court ruling, the
narrow Supreme Court ruling that we had come down recently.
Mr. LEACH. Mr. Speaker, I yield 2 minutes to our distinguished
colleague, the gentleman from Texas (Mr. Paul).
(Mr. PAUL asked and was given permission to revise and extend his
remarks.)
Mr. PAUL. Mr. Speaker, I thank the chairman for yielding me the time.
I am an original cosponsor of 1151. But the original bill never came
to the committee. It was quickly substituted with another bill, which I
think is seriously weakened from the original bill that we had. So I
would like to let all those 207 Members who are cosponsors that are not
voting on the bill that they signed their name onto know that there are
two major changes that have occurred.
One is that the multiple common-bond position of 1151 has been
removed. Now it is restrictive. And the other thing is there has been a
lot of regulations added, and I think that we should consider long-term
economic consequences and political consequences of opening up the door
to regulations and also what it means down the road as far as insurance
goes.
For instance, it was bragged upon, the bill was bragged upon because
the regulations of safety and soundness was good. We have had a lot of
regulation, for safety and soundness for banks and savings and loan,
and yet the FDIC and FSLIC had to be bailed out. The insurance deposit
for credit unions was started by private money, no government
subsidies, and has never been bailed out. So now we are going to
overlook the credit unions and make sure they are safer and sound.
I think it is the wrong direction that we are going. I think the
whole notion that we are going to have the Community Reinvestment Act
applied to the credit unions is going in the wrong direction. This is a
form of credit allocation and, actually, long term, will weaken the
credit unions.
I would like to speak up for the credit unions and say this bill has
been weakened to such a degree that they have opened up the doors, and
down the road they are going to be treated like the banks, and down the
road they will probably receive the taxation that banks have.
I resent the idea that the competitors and the small banks, who do
not like the competition of the credit unions, they say, well, let us
tax them and regulate them. So, in a way, we have accommodated the
banks by adding the regulations onto the credit unions.
I do not think this is going in the right direction, and we should
seriously consider a no vote on this legislation.
Mr. LaFALCE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from Vermont (Mr. Sanders).
Mr. SANDERS. Mr. Speaker, I thank the gentleman for yielding me the
time.
Let me begin by doing something that I very rarely do, and that is
concur with the remarks of my friend, the gentleman from New York (Mr.
Solomon). We should not be naive and not understand that the largest
banks in this country have done everything that they could to prevent
the passage of this legislation.
Mr. Speaker, as an original cosponsor of H.R. 1151, I am proud to be
on the floor to offer my strong support for this legislation and for
its passage today. At a time of increasing bank fees, increasing ATM
fees, increasing credit card fees, increasing minimum balance
requirements, and the loss of many locally-owned banks to large multi-
billion-dollar corporate institutions, credit unions today are more
important than they have ever been.
H.R. 1151 will go a long way toward ensuring the long-term viability
of credit unions, of allowing credit unions to expand rather than to
contract and wither away, which is clearly the goal of many large
banks.
Mr. Speaker, I make no apologies for being a strong supporter of
credit unions. I want to see credit unions grow. Because they are good
for the State of Vermont, and they are good for America. Congress
chartered credit unions not only to help people of modest means but to
give ordinary Americans a not-for-profit cooperative alternative to
for-profit banks.
If we do not act today, the Supreme Court decision would be extremely
harmful to tens of thousands of Vermonters and millions of Americans.
Let us pass this legislation.
Mr. LEACH. Mr. Speaker, I yield 2 minutes to my wonderful friend and
distinguished colleague, the gentleman from New York (Mr. Gilman), the
chairman of the Committee on International Relations.
(Mr. GILMAN asked and was given permission to revise and extend his
remarks.)
Mr. GILMAN. Mr. Speaker, I thank the gentleman for yielding me the
time.
Mr. Speaker, I rise in strong support of H.R. 1151, the Credit Union
Membership Act. I commend the distinguished gentleman from Iowa (Mr.
Leach), chairman of the Committee on Banking and Financial Services;
the gentleman from Pennsylvania (Mr. Kanjorski); the gentleman from New
York (Mr. LaFalce); and the gentleman from Ohio (Mr. LaTourette); for
their cosponsorship of this important measure.
[[Page H1877]]
This legislation was introduced in response to a recent Supreme Court
decision where the Court, in a narrow interpretation of the Federal
Credit Union Act of 1934, invalidated the International Credit Union
Administration's policy permitting multiple-group memberships.
H.R. 1151 redefines the 1934 law to provide for three types of
common-bond requirements for Federal credit unions: single common bond,
multiple common bond, community credit unions. It also provides
regulations pertaining to assets and reserve requirements which will
serve as additional protections for our consumers.
We recognize that this bill is not popular with the banking industry,
which claims that credit unions have an unfair competitive advantage
since they do not pay Federal taxes on their earnings. However, the
record discloses that credit unions do not damage banks or cheat
taxpayers and provides a worthy service.
Historically, the primary reason behind Federal regulators' support
for multi-employer credit unions was to try to prevent individual small
credit unions from going under when membership dropped due to corporate
downsizing. Had those credit unions failed, the cost of their cleanup
would have hit the taxpayers the same way the savings and loans
failures hit our Nation.
Mr. Speaker, the simple fact remains that credit unions do play an
important role in our Nation's financial environment. They allow
consumers the early opportunity to open small accounts without
experiencing prohibitive fees or burdensome restrictions.
In closing, let me say that while the Supreme Court may have used a
narrow interpretation of this 1934 law in making its recent ruling,
Congress does have the constitutional right to change laws, if needed,
should it believe the court acted in error; and I believe that is the
case today.
Accordingly, I urge my colleagues to join us in supporting this
worthy legislation.
{time} 1300
Mr. LaFALCE. Mr. Speaker, I yield 1 minute to the distinguished
freshman gentlewoman from Michigan (Ms. Kilpatrick).
(Ms. KILPATRICK asked and was given permission to revise and extend
her remarks.)
Ms. KILPATRICK. Mr. Speaker, it is a privilege to come today in
strong support of H.R. 1151. One of the top largest banks is in my
district. I support banks. But I also support credit unions and the
300,000 members in my district who are members of the credit union.
I want to commend the gentleman from Iowa (Mr. Leach) and the
gentleman from New York (Mr. LaFalce) and our ranking members. This is
the way true legislation should pass and work in this Congress, in a
bipartisan way, for the betterment of our American citizens. And this
bill just does that.
It is important that as we discuss this bill and as we vote
affirmatively for it, that, remember, we are in a large financial
market. The world is global. Credit unions account for 2 percent of the
financial market, and banks and other securities take care of the rest
of it. It is a good bill. H.R. 1151, as was mentioned, is pro-consumer,
pro-competition, and I strongly support it.
Mr. LEACH. Mr. Speaker, may I ask how much time is remaining on each
side?
The SPEAKER pro tempore (Mr. Hefley). The gentleman from Iowa (Mr.
Leach) has 1\1/2\ minutes remaining, and the gentleman from New York
(Mr. LaFalce) has 9 minutes remaining.
Mr. LEACH. Mr. Speaker, this side would like to reserve its time
until the conclusion.
Mr. LaFALCE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from Pennsylvania (Mr. Klink).
(Mr. KLINK asked and was given permission to revise and extend his
remarks.)
Mr. KLINK. Mr. Speaker, I thank the gentleman for yielding to me.
Mr. Speaker, I would like to begin by affiliating myself with the
remarks made by my dear colleague, the gentleman from Pennsylvania (Mr.
Kanjorski). Both sides have come together in what is truly a fine
moment of bipartisanship and what is really right for the country.
I will tell my colleagues, use our region of the country as an
example. Back in the days when the steel industry was booming and the
railroads were strong and the manufacturing section was strong, these
credit unions were begun for the employees, many times tens of
thousands of them who worked in those companies.
We have gone through a kind of a deindustrialization of this Nation.
Many of those steel plants and the railroad operations do not even
exist anymore, have been severely shrunk down. But other industries
have been spawned out.
Really, this bill today, if it is approved by the House, preserves
credit union membership for current members, and it is going to
preserve the opportunity for membership for many people across
Pennsylvania and across other parts of the country which have had to
merge and combine in order to survive.
The credit union, as I said before, serve one manufacturer. What we
are doing today is clarifying what is a common bond. This is good
legislation. This legislation will clarify the law. It will allow
multiple common bond groups to join together. It is the right thing to
do.
The banks truly have nothing to fear because, as many people here
know, 89 percent of the people who belong to credit unions also do
business with the banks. So I would recommend an ``aye'' vote.
Mr. LaFALCE. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman
from California (Mr. Filner)
Mr. FILNER. Mr. Speaker, I rise today to ask my colleagues, what
could be better for this country than a financial institution run and
organized by its members, members who feel comfortable saving and
investing for their futures at their institution, their credit union.
H.R. 1151 is about guaranteeing choice, choice for consumers who want
low cost, higher returns, and convenience. Nonprofit credit unions are
mostly employer-sponsored, employee-run. But to be financially viable,
each credit union needs about 500 members.
My district is filled with small employers. We need to protect these
employers' and these employees' rights to create and participate in
credit unions with broader membership bases. Credit unions came into
being to provide financial service for the everyday worker. H.R. 1151
ensures that these workers' rights will not be tampered with.
Mr. Speaker, all of the gentlemen in the House who have worked on
this have been thanked. I want to thank the thousands and tens of
thousands of credit union members around the country who got
politically involved, talked to their Congress people, wrote letters to
their newspaper, got on the talk shows. The credit union members around
this country did an incredible job educating the Members of Congress.
That effort will be rewarded with a vote today.
Mr. LaFALCE. Mr. Speaker, I yield 1 minute to a previous speaker, the
gentleman from Minnesota (Mr. Vento).
Mr. VENTO. Mr. Speaker, I thank the chairman and the gentleman from
New York (Mr. LaFalce) for yielding me this time.
I just wanted to make a comment because there is some
misunderstanding about some of the positions of various organizations.
Clearly, the suit that resulted in the Supreme Court decision was a
product of the banking associations.
Quite frankly, I think, since the decision, there has been a
recognition by the banking organizations to, in fact, look for a remedy
to this field of membership issue. I think it would be unfair not to
report that they had every intention that there be a grandfathered
provision. In fact, without the participation both by the various
groups, the coalition of bankers, and credit unions, and others, I do
not think we would be where we are today.
So while it is true that they had sought many other changes as is
applicable to the charter of credit unions to Federal law, the fact is
that they did make a positive contribution.
I know that they have reservations about the bill we are acting on,
but nevertheless I think that they were positive participants,
certainly in the court case and certainly in the remedy that is being
put forth today.
Mr. LaFALCE. Mr. Speaker, I yield 1 minute to the gentlewoman from
Texas (Ms. Jackson-Lee).
[[Page H1878]]
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, what a great day for
democracy. I thank the ranking member, and I thank the chairman very
much for allowing us to have a stand-alone vote on H.R. 1151.
Credit unions represent democracy at work. Credit unions provide its
members with higher savings rates, lower loan rates, and less fees. As
well, they provide those who have not had access to credit a friendly
atmosphere in which to seek credit.
Credit unions were originally chartered to be a kind of economic
ballast for working people. This H.R. 1151 does provide constraints; we
accept that. It provides choices; we accept that. But at the same time,
it gives opportunity to more than 70 million people in America to
belong to their credit unions and allows them to grow.
Yes, this legislation also provides that credit unions will not
discriminate against loans to low and modest income members. It makes
everyone a part of the family. This legislation allows us to work
alongside of our banking friends in the banking industry and to ensure
that credit unions are, in fact, part of the financial structure of
America.
I support H.R. 1151. Let us vote for it. Let us vote for democracy.
Mr. Chairman, I rise to support the Credit Union Membership Access
Act under suspension of the rules today. A Houston entrepreneur, has
written to say that ``As a business owner, I consider credit union
membership to be one of the most important benefits that I offer my
employees.'' Moreover, I have received numerous letters stating that
supporting H.R. 1151 means preserving consumers' freedom to choose
where they borrow money or invest their savings. Credit unions are
critical to ordinary Americans, and I am proud to be a member of the
Congressional Federal Credit Union.
H.R. 1151 represents landmark legislation for federal credit unions
and for their members. I am pleased to say that I have been a cosponsor
of the Credit Union Membership Access Act, sponsored by Representatives
Steven LaTourette and Paul Kanjorski, since July of 1997. Total
cosponsorship of H.R. 1151 now stands at 206, including the Speaker of
the House and Chairman of the Rules Committee.
Today, we are setting a good example of policy-making by separating
H.R. 1151 from the financial services overhaul plan (H.R. 10). I feel I
can speak for many members of this body when I say that the two pieces
of legislation deserve to be considered separately. In short, H.R. 1151
is significant legislation to all credit unions, and it is proper that
we treat it as a ``stand-alone'' bill.
It has been said that credit unions represent democracy at work.
Credit Unions are about people helping people. Credit unions are
present in every neighborhood in America. In the 18th Congressional
District of Texas, there are over 328,000 individuals who belong to
credit unions. These figures are a powerful reminder of the work we
have laid out before us today. Above all, credit unions are not-for-
profit institutions, built by the American people themselves. Credit
unions must be preserved.
Indeed, credit union members benefit by receiving higher savings
rates, lower loan rates and less fees on financial transactions than if
they did business with a bank. However, bankers across the country,
both large and small, have enjoyed record growth and profits.
Collectively they grew by $300 billion in 1997 alone. The credit union
industry's total assets were only $350 billion by comparison.
Credit unions were originally chartered to be a kind of economic
ballast for working class people, as well as for persons with modest to
low incomes. Preserving our constituents' rights to participate in a
credit union of their choice is in keeping with a long tradition of
American history.
The current dispute evolved from a policy adopted in 1982 by the
federal regulator for credit unions, the National Credit Union
Administration (NCUA). In 1982, the NCUA issued an interpretive ruling
and policy statement which provided flexibility to the field of
membership requirements for federal credit unions (FCU). Credit union
charters are granted on the basis of a ``common bond.'' The common bond
for establishing a credit union may be occupational, associational, or
community. This requirement (found in the Federal Credit Union Act of
1934) determines the field of membership and is unique among depository
financial institutions.
The NCUA's interpretation permitted membership in a company's credit
union could allow another company's to join its credit union, but only
if the potential number of new credit union members did not exceed
3,000.
In other words, H.R. 1151 virtually codifies the 1982 National Credit
Union Association's (NCUA) interpretive ruling and policy statement
which provided flexibility to the field of membership requirements for
federal credit unions (FCU). The NCUA's interpretation permits
membership in a FCU to consist of more than one distinct group so long
as each group has its own ``common bond,'' plus only a group with fewer
than 3,000 members shall be eligible to be included in the field of
membership of a credit union.
The bill also would prevent credit unions from discriminating when
considering loans to low- and modest-income members, a provision
similar to the Community Reinvestment Act of 1977 which applies banks
and savings institutions. In addition, credit unions would be required
to meet many of the ``safety and soundness'' capital requirements as
banks. The bill would also require the Federal Reserve to pay interest
on the ``sterile reserves'' banks are required to keep at the Fed. I
believe we can still continue to work with our banks on these issues.
Mr. Chairman, I urge my colleagues to stand up for the FCU to consist
of more than one distinct group so long as each group has its own
common bond. The NCUA's action was taken in response to changing
economic conditions and as part of an industry commitment to meet the
needs of individuals seeking credit union service.
In 1990, the American Bankers Association and several small North
Carolina banks filed a lawsuit contesting the NCUA's approval of
multiple group field of membership expansion for the AT&T Family
Federal Credit Union. In July 1996, The U.S. Court of Appeals for D.C.
overturned a lower court's decision and ruled that ``all members of a
federal credit union must share one common bond.'' Currently, under the
terms of several subsequent orders, FCUs cannot add new groups to their
fields of membership but the institutions are permitted to enroll new
members into those established groups already being served. The U.S.
Supreme Court decided to take up the credit union case in February. An
opinion was rendered on February 25, 1998 that seemed to favor the
banking industry.
In an attempt to protect the interests of credit unions, the Credit
Union Membership Access Act (H.R. 1151) was introduced March 20, 1997,
with an additional sixteen original cosponsors. The bill's aim is to
make clear that credit unions may serve multiple customers; H.R. 1151
is distinctly about consumer choice. In its original version, H.R. 1151
amended the Federal Credit Union Act to say ``the membership of any
Federal credit union shall be limited to 1 or more groups each of which
have (within such group) a common bond.''
Today, more than 70 million Americans belong to credit unions, and
industry officials have estimated that the Supreme Court's decision
will jeopardize 20 million of them. The legislation the committee
approved last week would allow all 20 million members to keep their
accounts, but it would set limits on credit union expansion. For
instance, one freedom and consumer choice of 70 million Americans. I
urge my colleagues to support H.R. 1151, the Credit Union Membership
Access Act.
Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
I am shortly going to yield back the balance of my time. Before I do, I
just want to say some closing remarks.
Again, it has been a pleasure working with the Chairman and the
Members from both sides of the aisle. The staff that really worked as
one staff in crafting this bill, is something we did on the IMF bill
also. It is something that I hope we can do in the next several weeks
and months on financial modernization. I look forward to doing that in
a very similar collegial fashion.
With respect to credit unions, I am proud to be a member of a credit
union and a thrift and a bank and some securities accounts, et cetera,
and have some insurance accounts also. These are all wonderful
approaches to financial services. We need to enhance competition, and
we need to protect and promote consumer interests in all financial
services legislation.
Within the confines of the credit union bill, we have to preserve the
best of the past going forward into the future. I think that is what we
have done in this bill.
Credit unions are very, very special. They are usually relatively
small. They are a place where we should know just about everybody. So
they are confined, generally speaking, to a rather local area.
Everybody who is a member is usually in close proximity to everyone
else. It is where we and people with whom we have a common bond can
save. It is where we can go for the basic essentials of life, the
purchase of a home, a small loan, a loan for a car,
[[Page H1879]]
leasing, financing, et cetera. This bill preserves the integrity of the
credit union concept.
Mr. VENTO. Mr. Speaker, will the gentleman yield to me?
Mr. LaFALCE. I yield to the gentleman from Minnesota.
Mr. VENTO. Mr. Speaker, I appreciate the gentleman yielding. I came
from a credit union family. My father ran a credit union. But,
nevertheless, I understand their role in terms of they fill a very
special place.
I was glad the gentleman mentioned the financial modernization. I
want to recognize the leadership, first of all, for pulling the rule
off the floor and preventing any polarization with regard to that
important issue. Many of us have worked on it for a decade. As I said
to my chairman and chairwoman, its demise, its death is greatly
exaggerated. I think after Easter, those of us that claim a Christian
affiliation do believe in resurrection, and we hope that we can vote on
it.
I am pleased that the leadership saw fit to give us the opportunity
to vote on this important bill today, and want to publicly and on the
floor thank the leadership for that and for the gentleman from Iowa
(Mr. Leach) and others that have gone ahead with this.
I think it is important that Members be able to record a vote in
favor of this. And I thank the gentleman from New York (Mr. LaFalce),
the ranking member and my friend, for yielding.
Mr. LaFALCE. Mr. Speaker, I see that the gentleman from New York (Mr.
Solomon), the distinguished chairman of the House Committee on Rules,
has returned to the floor on this important bill. And I look forward to
working with the chairman on financial modernization.
Mr. Speaker, I yield back the balance of my time.
Mr. LEACH. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, first, let me thank my two good friends for their
thoughtful words. As chairman of the Committee on Banking and Financial
Services, I support a strong and competitive financial service sector.
We need solid and viable banks, solid and viable saving and loans,
insurance companies, mutual funds, securities firms, and credit unions.
What is best for the American people is competition, choice. This
bill ensures a stable future for a solid industry, one that deserves
our respect because it has served the public so well.
In huge letters in the basement of a credit union in Iowa City, Iowa
is a quote from one of my State's heroes, a man a named Nile Kinnick.
It was 3 years after Nile Kinnick won the Heisman Trophy in the few
days before his death in World War II as a pilot that he wrote a letter
home in which he said ``people must come before profits.''
That is what the credit union movement is all about. That is why I
believe this House, despite angst from competitors, is obligated to
give the benefit of doubt to the credit union movement. I would urge
all my colleagues to support this bill.
Mr. KENNEDY of Massachusetts. Mr. Speaker, I would like to take this
opportunity to support H.R. 1151, the ``Credit Union Membership Access
Act.''
I have long been a strong supporter of credit unions. Credit unions
are an important alternative source of credit in our diverse financial
marketplace. Credit unions also represent the concept of voluntary,
non-profit membership.
This legislation resolves an ambiguity in credit union membership
rights that has been raised by the recent Supreme Court decision. We
need to act quickly to resolve this ambiguity.
At the same time, this legislation seeks to address important
questions of competitive balance and fairness between credit unions on
the one hand and banks and thrifts on the other.
I particularly want to take this opportunity to talk about an
important provision in H.R. 1151--the provision setting out credit
union community reinvestment obligations. With the enactment of this
provision, we will be reaffirming an important principle: a financial
institution which enjoys the benefits of federal deposit insurance has
an affirmative obligation to meet the credit needs of the entire
community or field of membership which it is chartered to serve,
including neighborhoods and individuals of low- and moderate-income.
With the enactment of H.R. 1151 in its current form, we will be
extending this obligation, currently imposed on federally insured banks
and thrifts, to federally insured credit unions.
Specifically, H.R. 1151 requires all credit unions nationwide to
provide affordable services to all individuals, including ``low- and
moderate-income individuals'', within their field of membership. It
further requires all credit unions organized on the basis of community,
neighborhood, or rural district to meet the credit and service needs of
the entire community which they are chartered to serve.
As with the implementation of the Community Reinvestment Act for
banks and thrifts, the bill requires the credit union regulator, the
NCUA, to evaluate credit unions in meeting these obligations, and
requires the public release of those evaluations. Finally, the bill
requires the NCUA to take remedial action against credit unions which
fail to meet these obligations.
A community reinvestment requirement for banks and thrifts has been
in effect since the passage of the CRA law in 1977. Despite early
concerns by the banks, CRA has proven to be a tremendous success. To
date, banks have made CRA commitments of $400 billion in low-income and
minority neighborhoods.
So many of the banks which originally opposed CRA now support it,
recognizing that low-income lending can be a new source of profits.
And, the banking regulators acknowledge that community lending does not
negatively affect safety and soundness.
During the course of debate and markup on H.R. 1151, it was debated
whether a community reinvestment standard was necessary for credit
unions, since by definition they are chartered to serve their members.
While it is true that the majority of credit unions ably and
responsibly serve low-income and minority members, there was also
committee testimony that some credit unions did not have such a
sterling record.
The great benefit of requiring the credit union regulator to evaluate
credit unions' record of community reinvestment is that we will no
longer have to guess which credit unions are and which are not serving
the credit and service needs of their entire field of membership.
Credit unions which are meeting those needs will have no problem with
this requirement. Those that are not merit the scrutiny that this
provision will give.
A community reinvestment standard for credit unions has been in
existence for 16 years in Massachusetts. The record there is that such
a standard is both necessary and effective. CRA exams for Massachusetts
credit unions have demonstrated that there were a number of
institutions that did not have a good record. However, over time, with
the scrutiny of this process, the community lending record of
Massachusetts credit unions has improved. Quite simply, this
requirement works.
Now, it is time to extend this requirement nationally to all
federally insured credit unions. As we move into conference with the
Senate, I urge members to support the community reinvestment provisions
in H.R. 1151, and to fight the efforts of the enemies of community
reinvestment who may try to strip out or water down these provisions.
I urge adoption of H.R. 1151 in its present form.
Mr. PAUL. Mr. Speaker, since I was the first one in this Congress to
step forward and introduce legislation affirming the NCUA's position
allowing multiple common bonds for credit unions and signed on as a
cosponsor of H.R. 1151 as originally written, I feel that I am in a
disagreement among friends. I must oppose this bill because of the new
regulations it imposes on credit unions and does nothing to address the
legitimate concerns of the banks.
While I strongly support the expansion of the field of membership for
credit unions, the new regulations imposed upon them demonstrate a
decision to follow the wrong path to ``level the playing field'' with
banks and other financial institutions. A better approach would have
been to lead the congress towards less taxes and less regulation. H.R.
1151, The Credit Union Membership Access Act, as amended by the
committee, follows a path of more regulations and leads toward higher
taxes on credit unions while the Financial Freedom Act, H.R. 1121,
which I introduced a year ago, lowers taxes and regulations on banks.
While H.R. 1151 does not impose new, direct taxes on credit unions, I
fear that that day is just around the corner.
The NCUSIF was the only deposit insurance fund started without any
federal seed money and the credit unions never came to Washington for a
taxpayer-funded bailout. In fact, allowing multiple common bonds for
credit unions enhanced their safety and soundness. This bill will add
new ``safety and soundness'' and CRA-like regulations on credit unions.
These regulations will add a burdensome regulatory cost. This cost will
be passed on to the consumer in the form of higher fees, higher
interest rates and less service. It is the marginal consumer who will
lose the most when this bill becomes law.
The estimated, aggregate cost of bank regulation (noninterest
expenses) on commercial banks was $125.9 billion in 1991, according to
The Cost of Bank Regulation: A Review of the
[[Page H1880]]
Evidence, Board of Governors of the Federal Reserve System (Staff Study
171 by Gregory Elliehausen, April 1998). It reports that studies
estimate that this figure amounts to 12 percent to 13 percent of
noninterest expenses. These estimates only include a fraction of the
``most burdensome'' regulations that govern the industry, it adds,
``The total cost of all regulations can only be larger.''
These regulations, under which the credit unions will now suffer a
greater burden with the passage of this bill, impose a disproportionate
burden on smaller institutions. These increased, and unfairly imposed,
regulations will stifle the possibility of new entrants into the
financial sector and contribute to a consolidation and fewer market
participants of the industry. As the introduction of new entrants into
the market becomes more costly, smaller institutions will face a
marginally increased burden and will be more likely to consolidate.
``The basic conclusion is similar for all of the studies of economies
of scale: Average compliance costs for regulations are substantially
greater for banks at low levels of output than for banks at moderate or
high levels of output,'' the Staff Study concludes.
Smaller banks face the highest compliance cost in relation to total
assets, equity capital and net income before taxes, reveals Regulatory
Burden: The Cost to Community Banks, a study prepared for the
Independent Bankers Association of America by Grant Thornton, January
1993. CRA compliance costs for small banks was $1 billion and 14.4
million employee hours in 1991. For each $1 million in assets, banks
under $30 million in assets incur almost three times the compliance
cost of banks between $30-65 million in assets. This regulation almost
quadruples costs on smaller institutions to almost four times when
compared to banks over $65 million in assets. These findings are
consistent for both equity capital and net income measurements,
according to the report.
The IBAA study identifies the Community Reinvestment Act as the most
burdensome regulation with the estimated cost of complying with CRA
exceeding the next most burdensome regulation by approximately $448
million or 77%. Respondents to the IBAA study rated the CRA as the
least beneficial and useful of the thirteen regulatory areas surveyed.
In short, this bill takes the most costly and least beneficial and
useful regulation on banks and adds a similar, new regulation on credit
unions. Reducing the most costly, and least beneficial and useful
regulation on the banks would have been a better approach.
In addition to all of the problems associated with the obligations
and requirements that the government regulations impose on the
productive, private sectors of the economy, the regulations amount to a
government credit allocation scheme. As Ludwig von Mises explained well
in the Theory of Money and Credit in 1912, governmental credit
allocation is a misdirection of credit which leads to malinvestment and
contributes to an artificial boom and bust cycle. Nobel laureate
Frederick A. Hayek and Murray Rothbard expounded on this idea.
The unintended consequences of the passage of this bill, as written,
will be to stifle the formation on new credit unions, consolidate
current credit unions into larger ones better able to internalize the
cost of the additional regulations, and lower productivity and economic
growth due to the misallocation of credit. This increased burden must
ultimately be passed on to the consumer. The increased costs on credit
unions this bill imposes will lead to a reduction of access to credit
unions, higher fees and higher rates. These provisions are anti-
consumer. The marginal consumers, those who currently can only receive
a loan from a credit union without the burden of CRA, are the ones who
will suffer under the provision of this bill. I hope that the bill can
be improved as the process continues and lead to less regulations and
other taxes on banks rather than more regulations and other taxes on
credit unions.
Mr. ABERCROMBIE. Mr. Speaker, I rise in support of H.R. 1151, the
Credit Union Membership Access Act, and I urge my colleagues to vote in
favor of the bill today.
Development of this bill is the product of long and hard work, not
only by the House Committee on Banking which has brought the bill to
the House floor, but by millions of individual members of credit unions
across the country who let Congress know of the importance of the
Supreme Court decision on this matter earlier, and of the need to move
H.R. 1511 as a result of that decision.
The legislation we are considering today is a compromise that ends a
dispute largely between credit unions and the nation's banks. Federal
regulators had interpreted federal law to allow multiple common bond
memberships, and one result was a rapid increase in credit union
membership. The increase in credit union membership came at a time when
there was an expansion in the scope and type of services they had
traditionally provided members, resulting in competition with
commercial banks, thrift institutions and other financial services.
Congress is now in the process of redefining the nature of all
financial institutions so it is timely that we make a specific decision
on the nature and scope of credit unions and the services they provide.
And I believe enactment is H.R. 1151 is essential for competition with
the new types of financial institutions now becoming a reality with the
distinctions ending between banks, insurance firms, securities and
commercial businesses. This bill is about making sure consumers have a
choice, today and in the future.
With a population of 1.3 million people, Hawaii has more than 550,000
credit union members in 113 affiliated credit unions. Hawaii's
traditional cultural values have resulted in one of the strongest
credit union movements in America. Many first generation immigrants
brought with them a system called tanomoshi. Workers and families in
sugar cane and pineapple plantations in Hawaii pooled savings from
which loans were provided for emergencies or more often for one family
to start a business. When the business prospered, the funds would be
repaid to the group and it would revolve to another family. In this
way, much of the business, middle class in Hawaii developed from its
plantation agriculture economy. The reality is that we had credit
unions in Hawaii long before the mainland. It was simply called
tanomoshi instead of credit unions. This is a grass-roots democratic
movement built on the foundation of self-help and group identity.
H.R. 1151 allows current credit union members to continue their
membership. New membership groups must have less than 3,000 common bond
members at the time of joining, and groups will be within reasonable
proximity to the credit union. However, there are circumstances when
even these restrictions can be waived. It is important to credit union
members as well as to their competitors that depositor insurance
provisions be strengthened under the bill. It would also require that
``persons of modest means'' within each credit union membership field
be served.
Mr. Speaker, I believe H.R. 1151 is a solid, reasonable and
responsible compromise. We must have a healthy and vigorous credit
union movement in the 21st Century to meet the needs of individuals as
well as the need of the nation for a diverse, competitive financial
industry.
Ms. KILPATRICK. Mr. Speaker, I rise today in strong support of H.R.
1151, the Credit Union Membership Access Act. This bill would overturn
the February 25, 1998 decision rendered by the Supreme Court in the
National Credit Union Administration v. First National Bank and Trust,
a decision that would have severely restricted the ability of credit
unions to grow and expand. In essence, the Supreme Court said that the
National Credit Union Administration (NCUA) illegally allowed credit
unions to expand beyond their original base of membership. His
legislation allows credit union members who were added under NCUA's
policy to remain with their credit union, and expounds upon the
definition of ``common bond.'' This bill is a victory for poor people,
for low-income families, for working-class people, and for consumers. I
would also like to add that I am greatly pleased that the collective
wisdom of the Congress prevailed in deleting this legislation from the
larger, sweeping omnibus financial services reauthorization bill
yesterday. We can all say, in a truly bi-partisan manner, that we are
finally getting to the work that truly matters to American taxpayers
throughout our great nation.
Of course, I support the banks in the 15th Congressional District and
in our nation. I also support our credit unions, and I have been a
member of a credit union for a long, long time. Banks and credit unions
have operated side-by-side since the first credit union was founded in
Manchester, New Hampshire in 1909. In our nation, we have over 12,000
credit unions serving over 70 million people. Close to 300,000 members
of credit unions reside in my Congressional District. Credit unions are
nonprofit, cooperative financial institutions owned and run by its
members. These democratically controlled organizations provide their
members with a safe place to save and borrow at reasonable rates. In
order to become a member of a credit union, you must be eligible for
membership. This legislation will allow each individual credit union to
continue to decide whom it will serve.
A recent article in The Washington Post compared recent fees among
several areas banks and one credit union. In practically every
instance, the credit union's fee, rates or borrowing terms
[[Page H1881]]
were more favorable to those of banks. In this era of bank
consolidation and fewer bank branch offices, community development
credit unions fill a special void. These credit unions primarily serve
low-income members in distressed and financially underserved areas, and
help fill the financial needs and dreams of poor and working-class
people and families.
Again, I want to applaud the hard work of Chairman Jim Leach and my
leader, Ranking Minority Member John LaFalce, for their dedication and
effort in getting this bill to the floor under a fair and truly bi-
partisan manner. This legislation illustrates what Congress can do if
Members have the opportunity to work in a truly fair, just and bi-
partisan manner. As we move toward the next millennium and a global
economy, banks and credit unions will have no choice but to work
together to ensure the fiscal health of all of our constituents,
businesses, and corporations, and I look forward to working with credit
unions and banks to that very goal. Thank you for your time.
Mr. KUCINICH. Mr. Speaker, I was happy today to cast my vote for H.R.
1151, the Credit Union Membership Access Act. I was happier still that
the majority of the House of Representatives voted for H.R. 1151 as
well.
Credit unions are the banks of working people: Credit unions do not
charge exorbitant bank fees; they do not have excessive account
minimums. They make low interest loans, mainly to their members in the
communities in which they live. Credit unions are run by their members,
who have a voice in the operation and policies of their credit union.
Small businesses depend on credit unions for those reasons because
offering credit union membership as a benefit to prospective employees
is a benefit that workers value.
Credit unions are very small compared with banks. The average credit
union has less than $28 million in assets--less than \1/16\th the
assets of the average bank. The two largest U.S. banks (Chase and
Citibank) combined have more assets than all 12,047 credit unions
combined. Furthermore, banks today control nearly every dollar in
savings (93 percent) and in loans (94 percent) in the United States.
With nearly complete market dominance, banks have also chalked up
record profits in recent years, posting an all-time record last year of
$52 billion, much of which is due to the many new fees they are
charging small consumers.
But the banks were not satisfied, and in spite of their overwhelming
market dominance and record profits, they lobbied to squash credit
unions. In view of their power, it is historically significant that
Congress did not serve today as a handmaiden to market power--credit
unions and their 70 million members prevailed. So did an important, if
embattled, democratic tradition in America--the non-profit, member-run
and member-controlled financial institution.
Mr. CUNNINGHAM. Mr. Speaker, I rise in support of the Credit Union
Membership Access Act (H.R. 1151). This legislation will reverse the
February 25, 1998, Supreme Court ruling (AT&T Family Federal Credit
Union et al. v. First National Bank & Trust Co.) which sent shockwaves
through this Nation's 70 million credit union members.
That decision threatened the future and financial safety of our
Nation's credit unions. The 51st District in California, which I
represent, is served by more than 230 different credit unions with more
than 305,000 members. By passing this legislation, we will ensure that
not a single credit union member will lose their choice of financial
service provider.
This legislation affirms the commitment of this Republican Congress
to keep a healthy, competitive financial service industry in America. I
call on all my colleagues to join me in support of credit union members
and to vote for H.R. 1151.
Mr. WALSH. Mr. Speaker, I rise today in strong support of H.R. 1151,
the Credit Union Membership Access Act. I am proud to have been an
original cosponsor of this important legislation.
My vote is a continuation of longstanding personal backing for credit
unions in general. I believe they provide an invaluable service to
working men and women--a service which is both convenient and
comfortable.
Credit unions are familiar places which in many cases don't offer a
full range of banking services but nevertheless do provide basic
financial assistance--whether it be pocket money or a small unsecured
loan.
After the U.S. Court of Appeals for the District of Columbia
overturned a credit union decision in July of 1996, many of us in
Congress realized the need for legislation to protect credit union
members. Today's vote is the culmination of our efforts.
By passing this legislation, we allow Americans to choose the
institution in which they put their money. By promoting continued
operation of credit unions in a sound and reasonable manner, we spur
competition and encourage savings. By supporting credit unions in this
manner, we demonstrate our faith in the wisdom of working people.
On behalf of my constituents in Central New York who will benefit
from this consumer protection law, I want to thank the House for
today's passage.
Ms. WATERS. Mr. Speaker, there has been much discussion recently
about credit unions. I submit for the Record recent remarks by Norman
D'Amours, the chairman of the National Credit Union Administration, in
which he discusses the proper role of the credit union movement.
The Future of Credit Unionism
(By Normal E. D'Amours)
Good morning. It is always a pleasure and an honor to
appear before so many dedicated credit union movement
representatives. I thank Chairman Buck Levins and President
Dan Mica and all of you for the opportunity to do so.
It is also a pleasure to report that once again credit
unions had an outstanding year and their financial
performance continues to be magnificent.
Both the NCUA and credit unions were closely examined by
the U.S. Treasury Department last year and both emerged with
their colors flying high. You can all be very proud of the
success, strength, and safety of credit unions across the
country.
Although all of the statistical measurements are very
positive and highly encouraging, we do face some serious
challenges. For instance, you have heard much importuning
from NCUA and others about the critical need to become Year
2000 compliant. It is difficult to overstate the importance
of this issue and it requires our maximum attention. It is
also difficult to overstate the importance of successfully
responding to the bankers' attacks on our field of membership
policies. You have heard, and will continue to hear,
extensive discussions of these problems from me and others.
But today, I want to talk about what I think is a more
serious problem facing credit unions. It is more serious
because it affects your ability to maintain the essential
character of credit unionism in the United States of America.
In my view, credit unionism in the U.S. seems to be drifting
toward becoming a not-for-profit banking sector. We have seen
this happen in other countries where credit unions have
become little more than member-controlled financial
institutions. Institutions that are virtually
indistinguishable from mutual banks.
Some in the credit union movement have advised me that this
drift toward a banklike structure has already gone too far to
be stopped. I don't believe that. It is not too late to stop
this drift, but it will not be easy to do so. Changing course
will require an honest acknowledgement of the problem.
Stubborn denial serves no productive purpose. A thoughful
decision is needed.
I believe credit unions of all sizes and of differing
memberships need to decide whether they wish to remain
involved in the historical, philosophical and statutory
mission of reaching out to people of small means. Whatever
their own size, structure or membership characteristics,
credit unions need to decide whether they wish to remain
involved in the cooperative effort to reach out to empower
the economically underserved. Indeed, whether they wish to
continue operating in a cooperative atmosphere.
It does not appear that these questions are being
sufficiently acknowledged, debated, or discussed in the
grassroots credit union movement. And in my view, it is
unlikely that will happen until credit union volunteers
reclaim their historic responsibilities and unambiguously
reassert their role as full participants in the setting of
credit union policy. Unpaid volunteers must demand a stronger
voice in setting the direction of the credit union movement.
This is necessary because in some instances professionals
have taken a command of the movement that has effectively
usurped the role that was intended for volunteers.
The founders of this movement thought it absolutely
essential that unpaid volunteers should set the tone.
Friedrich Raiffeisen believed that volunteerism constituted
``. . . one of the most important principles observed by
Credit Unions.''
Alphonse Desjardins agreed that the principle of volunteer
participation was critical to credit unionism. He worked to
spread credit unionism and served his credit union as
president without taking any remuneration from the time he
organized the credit
[[Page H1882]]
union with a handful of dime and dollar deposits until he
died in 1920, at which time its assets exceeded $1 million.
Edward Filene and Roy Bergengren shared these views of
volunteers.
Certainly, no one is suggesting that competent and
professional managers are not vital to credit union
operations. They surely are. The point is that credit union
founders understood the system needed a decision-making
function as untainted as possible by self-interest and the
drive for profit or personal enrichment. They knew that the
course of economic decision-making will necessarily be
different if the decision-makers have a financial stake in
the outcome, be it profit or pay.
It is surprising to observe how far we've strayed from this
principle. While credit union directors are still volunteers
who act unselfishly and take their responsibilities to heart,
and we thank God for them, it is not uncommon to find
professionals in control of policy. This is especially true
in the big decision-making processes that affect the overall
direction of the national credit union movement. These
processes tend to be controlled by some trade group and other
professionals with not nearly enough meaningful input from
true volunteers.
Let me be clear. I do not intend in any way to demean the
importance and value of professionals to credit unions. I
know that professionals both in trade groups and in credit
unions are crucial to the economic success of credit unions
and the movement. I know that thousands of them are as deeply
imbued with the wonderful spirit of credit unionism as are
volunteers. I've personally met many of them and admired
their operations in both large and small credit unions.
But professionals in the credit union world should not
dominate policymaking to the virtual exclusion of volunteers.
Credit unions deserve a system that includes strong and
focused volunteer participation at the national and state
decision-making levels. Such participation is needed to help
set the system's objectives and help keep it on track.
Unfortunately, that is not the way it seems to be working
today. Instead, it appears that national or statewide
decision-making in the movement today is almost totally
professionalized. Just consider that there is not a single
true volunteer serving on the CUNA Board, whereas a quota has
been reserved to guarantee trade group professionals 25
percent of the membership on that board. When one considers
that the credit union movement is overwhelmingly populated by
volunteers, one must be amazed not only at this obvious lack
of volunteer participation, but also at the failure of the
democratic processes that should protect against such
representational distortions.
Ruth Witzeling, a long time correspondent for CUNA's Center
for Professional Development, said it well a few years ago:
``Volunteers are one of our greatest strengths, one of the
greatest and most visible manifestations of how credit unions
are different.'' She is right, and the credit union founders
were right. And that means it is the responsibility of the
volunteers working closely with professionals to bring back
into balance the structure of the credit union movement.
More volunteer involvement could mean a greater emphasis on
the social mission of credit unions. It is amazing how much
subtle and not so subtle resistance can be provoked in
certain quarters simply by pointing out the social mission to
which credit unions were dedicated by their founders, their
history, and by federal statute. There should be no
resistance to this defining principle.
Indeed, the fact is that credit unions are successfully
doing exactly that sort of work today. Although for some
reason they are not bragging about it nearly as much as they
should.
Alphonse Desjardins warned his contemporaries against ``the
error of thinking and doing only dry business, forgetting the
most important . . . social and educational aspect of credit
unions.'' Edward Filene and Roy Bergengren also stressed the
importance of the social mission of credit unions. Clearly
these founders had something in mind beyond providing the
best high tech financial system available and earning good
salaries for themselves. And it was this core belief that
found expression in the Federal Credit Union Act's reference
to serving ``people of small means.''
I know from experience that a credit union regulator who
speaks out about this social mission of credit unions will be
criticized by some in the movement for going beyond the
narrow concern of the safety and soundness of credit unions.
Of course, such criticisms conveniently overlook the fact
that credit unions, by statutory directive, have a specific
social mandate to serve people of small means. To go beyond
what Desjardins called ``dry business.''
And isn't it strange that while such attitudes exist within
the credit union system, we hear the Comptroller of the
Currency, leaders at the Federal Reserve System, and others
in the banking world urging their constituents to become more
active in serving inner cities and the underserved? Yet I am
not aware that the banking sector has criticized their
regulators for such importuning comments. And remember those
regulators do not have the statutory social mandate that
Congress has imposed upon the NCUA.
It is regrettable that credit unions and their trade groups
are frequently not perceived as being in the leadership of
modern efforts to empower those who are financially
underserved. Isn't that the function of credit unions? Why do
some credit union people seem unwilling to warmly embrace
this social element of credit union philosophy?
I know that most of you are accomplishing that social
mission. You are and you should be very proud of that. But
there is much more that could be done by the credit union
movement to reach out to the people who are financially
underserved in order to help them bring themselves into the
financial mainstream. It is not enough to demonize and attack
bankers for their fees or for a lack of commitment to the
underserved. It is what credit unions are doing that should
be stressed, not what others are not doing.
If credit unions lose sight of their social mission they
will become indistinguishable from the not-for-profit banking
sector. And that will cause credit unions to lose the support
they now receive from consumer groups, from the U.S.
Congress, and from the American public. That will, in time,
bring about taxation and bank-like regulation which will
further accelerate their transmutation into not-for-profit
banks.
If the credit union movement wishes to intentionally become
more bank-like, more free market competitive, and down play
its social mission, that is a course it has a right to take.
A not-for-profit member owned banking system has a value that
is well worth defending. But that decision should be a
consciously deliberated one. It should not be the product of
drift. In a truly democratic movement, those who disagree
with such a course should have an opportunity to say ``no''
even if they are a minority. Those who disagree should have
an opportunity to express their opposition to becoming a not-
for-profit banking sector.
Nor should anyone hesitate to raise these questions. Over
the history of credit unionism, many prominent leaders have
worried and spoken out about losing sight of purpose.
Alphonse Desjardins, as we have seen, warned about falling
into the error of doing only ``dry business.''
Ralph Swoboda, a recent CUNA President who helped launch
the renewal process, said that the real threat he saw to the
credit union movement ``. . . despite all the rosy numbers
and the good growth, [is] the deterioration of commitment to
credit union ideals and philosophy.''
Al Williams, who was a good friend of mine and a former
beloved chairman of CUNA and whom this conference is
honoring, said in a speech only ten years ago that ``Perhaps
we've lost sight of our purpose . . . it's time for us to
rededicate ourselves to the ideas that created the credit
union movement in the first place. We can grow and pile asset
upon asset, but if we forget who we are and why we're here,
we will have failed.''
One year later in 1989, a 45 year credit union organizer
and leader named Donald J. McKinnon said he thought credit
unions were headed toward their ``last phase'' because:
``They have not kept purpose constant''.
Some credit union leaders have complained to me that by
quoting from our founders and early leaders, as I often do, I
tend to freeze us in a horse and buggy financial world. Well
the quotes I've just used really aren't ancient history. But
I could have gone back nearly 2000 years to the New
Testament. In Mark 8:36, it is said ``What shall it profit a
man if he gains the whole world yet lose his own soul.'' You
simply must not allow credit unionism to lose its soul.
If credit unions do not preserve their social mission of
empowerment, what financial sector will be fully committed to
giving all of America's citizens a fair chance to
meaningfully participate in the American economic system?
What financial system will dedicate itself to providing all
Americans with a fair chance at becoming the masters of their
own economic destinies? What financial institutions will
reach out to liberate people of small means from the
depressing burdens of unmanageable debt?
And we have another problem today that goes to the soul of
credit unionism, our field of membership policies.
Field of membership policies present yet another area where
critical choices must be made.
Few would disagree that one of the most vexing problems
confronting credit unions today is the rapid expansion of
community chartering and the overlapping of occupational and
associational credit unions.
The bankers' early success in the At&T Family case and the
resulting court injunction have driven this issue to a
preeminence that has caused a division both on the NCUA Board
and among credit unions. Some would like this question
avoided in order to dodge the resulting controversy. That
would be a mistake. If this question of overlaps is not
thoughtfully resolved, we run a risk of causing serious
damage to the basic cooperative nature of credit unionism and
accelerating its metamorphosis into a not-for-profit banking
system.
I understand and respect that there are some who sincerely
believe that competition among credit unions is good for the
credit union member and therefore should not be restrained.
While there is certainly some validity to that argument, it
tends to downplay the fact that credit unions are
quintessentially cooperatives. They are cooperatives both in
their internal structures and in their inter-credit union
operations. Unrestrained competition is by definition the
antithesis of cooperation. After all, the legitimate
objective of free market competition is to destroy
competitors and steal their customers.
[[Page H1883]]
Certainly a mild level of competition is not harmful, but
unrestrained free market competition among credit unions is
destructive and might encourage predatory practices. That
would make it very difficult if not impossible for credit
unions large or small to maintain the trust needed to
effectively pool their assets, liquidity, operational skills
and expertise. The breakdown of this inter-credit union trust
and cooperation and the opening of unrestrained free market
competition could especially hurt small and mid-sized credit
unions. It could result in the cherry-picking of their more
affluent members and a loss of mentoring and other benefits.
An important effect of this could be the drying up of
the liquidity pools smaller credit unions need access to
in order to meet the needs of their members of small
means.
And there is yet another vexing question lurking in the
background with regard to this issue of overlaps and
unrestrained free market competition. If community expansions
will permit the capturing of overlapped occupational or
associational credit union members on the basis of a member's
right to the best level of services available, then why
should not charter applications by new or existing
occupational or associational credit unions be allowed to
identify the exact same membership field as an existing
credit union, so long as their purpose is to provide better
or more services to the members of the existing credit union?
Is that where you want to go? This possibility is not a
frivolous one. It is supported by the exact same logic that
has recently caused a change in our approach to overlaps. And
the NCUA Board has recently been denying exclusionary clauses
even when the involved credit unions mutually and voluntarily
agree to the exclusionary clause.
If credit union field of membership overlap and
exclusionary policies are going to be driven by the single
goal of improving the quality and quantity of member
services, then we must prepare for a bank-like survival of
the fittest culture.
In my view, the key ingredient needed for a proper
resolution of these and other issues is a greater involvement
by volunteers. The credit union movement has become much too
thoroughly professionalized. Much too driven by economic
interests and the profit of individuals. Volunteers need to
reassert their proper roles and authority.
How can this be done? Clearly, one possible means to that
end is through volunteer organization. The object could be to
give volunteers an equal voice by creating active, well
funded organizations of credit union volunteers at the state
and/or national levels. Professionals who believe in the
social mission of credit unions and who are willing to work
in full partnership with volunteers would be recruited and
retained.
Or perhaps true volunteers should insist on having a strong
voice on the boards of all credit union trade groups. Any
groups or associations of professionals that might exist
independently might be required to interface with boards on
which volunteers have a strong voice.
Moreover, volunteers should insist on significantly
increasing the amount of education and training they have
access to. Volunteer education and training has not been
given the overall attention it deserves. That maybe the
result of volunteers not being sufficiently involved in the
decision-making of trade groups that should be better focused
on this issue.
Those of you volunteers and professionals who can see over
the horizon and who wish to avoid the bank-like destiny that
has befallen credit union movements in other countries need
to ponder these issues. I raise them today only to stir
discussion and collegial cooperative action, not hostility.
If the credit union system needs to correct its course,
someone must act. These are decisions that should be made
thoughtfully and deliberately. Whatever the ultimate fate of
credit unions will be, it should be the product of a
conscious choice not aimless drift. And volunteers must have
an important voice in making that choice.
Your conference theme this year makes clear your belief
that the credit union movement has the ability to mold its
own future. It is not too late to make the choices that will
allow you to keep purpose constant. But the hour of decision
is at hand. The right course, I believe, can only be charted
with the collective wisdom and a proper partnership of both
volunteers and professionals working together.
To do nothing means a continued drift away from your
founding principles. How will you choose?
Mr. QUINN. Mr. Speaker, I want to speak today about a great American
success story. I am referring to our nation's credit union. Credit
unions are far different from banks. Credit unions are democratically
owned and primarily engaged in consumer loans. It is this simplicity
that is the secret to their success. Credit unions aren't in business
to buy banks, or sell insurance, or acquire commercial affiliates. More
importantly, credit unions are not-for-profit. All revenues are
funneled back into its members in the form of low-cost loans.
I am a very proud sponsor of the Credit Union Membership Access Act.
This bill will preserve credit unions in their current status. Credit
unions will be able to continue to expand their membership outside the
original group, as long as new members share a common bond with each
other. This bill will stop the incessant attacks by bankers and protect
all current credit union members.
The many differences between credit unions and banks are what make
credit unions so valuable. Even bankers admit that there is a certain
percentage of the populations that can't be served by banks. Low wage
workers often times can't afford high banks fees or loan rates. Without
credit unions, these people would be forced to turn to check-cashers,
pawnbrokers and loan sharks.
I know that in my district of Buffalo and Western New York, thousands
of people rely on credit unions for their financial needs. I have
constituents tell me all the time how much they love their credit
union. Many claim that they wouldn't have been able to afford their
home or the loan to start a new business without their credit union. It
is clear to me that credit unions are critically important for
thousands of Americans. I urge Congress to continue to allow credit
unions to play a role in their lives now and in the future.
Mrs. CAPPS. Mr. Speaker, I rise today in support of HR 1151, the
Credit Union Membership Access Act. This bill would overturn a recent
Supreme Court decision that would decimate the credit union industry
and deprive consumers across this country of a vital banking services.
Credit unions are an incredibly important segment of our financial
services industry. They provide low-cost, convenient banking services
for some 70 million Americans, including over 120,000 members in my
district on the Central Coast of California. As a member of a credit
union myself, I can attest to the value of these important institutions
to our communities, large and small.
Mr. Speaker, since the Supreme Court decision last month credit union
members in my district have written or called my office by the hundreds
to express their very real concern that the Congress act quickly on
this legislation. And today the House has answered that call.
My husband was an early cosponsor of HR 1151 and I made sure that one
of my first actions was to put my support behind this legislation as
well. I am very pleased that the House has brought this legislation to
the floor and I hope that the Senate will act quickly so we can put our
constituents' fears to rest.
Mr. LaFALCE. Mr. Speaker, February's Supreme Court decision presented
the Congress with a difficult policy decision--whether to uphold the
original intent of the 60-year-old Federal Credit Union Act, and
possibly deprive up to 20 million Americans of their credit union
membership, or expand the scope of the Act to authorize credit unions
to serve a broader segment of the American public in competition with
other financial institutions.
While it is clear that a majority in Congress, and the public
generally, have rejected this first option, the alternative presents a
far more difficult policy question--How do we permit credit unions to
expand their membership and compete broadly in the marketplace while
justifying their special treatment and tax exemption to competing
financial institutions and to taxpayers?
The Banking Committee took on this broader policy question,
proceeding on a collegial and nonpartisan basis to craft a compromise
bill that addresses not only the issues raised by the Court, but many
other issues as well. The bill incorporates basic principles of a
proposal which I circulated in November to encourage discussion of a
compromise on the field of membership issue. But it also does much
more.
First and foremost, it protects the membership of every current
credit union member and every group within a credit union. It would
also permit common bond credit unions to continue to expand their field
of membership by including new occupation and association-based groups.
This expansion is limited, however--first by requiring the creation of
new, separate common-bond credit unions wherever feasible and, second,
by requiring that smaller groups be included within another credit
union that is located in the same general area as the group--thereby
reinforcing a broader geographic ``common bond.''
The bill would also limit the size of new common bond groups that can
be included within an existing credit union to no more than 3,000
persons. While I would have preferred a smaller limit, possibly only
1,000 persons, I supported this compromise with the understanding that
the requirements to charter separate credit unions and to include
groups within local credit unions would be strictly implemented by
NCUA.
This latter requirement--to include new groups only within credit
unions that are located in reasonable proximity to the group--is
extremely important in reinforcing the crucial concept of a common bond
among credit union members. While many credit unions need to go beyond
their original membership group to grow and to continue to provide
affordable financial services, it is the Committee's view that other
groups that reside, work and regularly interact with one another in
[[Page H1884]]
close geographic proximity are more likely to share a common sense of
identity, a common sense of affinity and, thus, a broader
``geographic'' common bond.
This should not mean, however, that a credit union can incorporate
every group in sight or expand over broad regions. It was my intent in
offering this provision to the bill that NCUA give a conservative
interpretation to the terms ``reasonable proximity'', allowing credit
unions located in a larger city to incorporate new groups located in
nearby sections of that city. It should not permit, for example in my
Congressional district, a credit union located in one city, such as
Rochester, to include common bond groups located in another city, such
as Buffalo. And credit unions located in smaller cities or towns, like
Lockport or Niagara Falls in my district, should be permitted to
incorporate new groups within or in the vicinity of those
jurisdictions.
H.R. 1151 also reinforces and strengthens the credit unions' mission
to serve people of modest means. It defines, for the first time, the
credit unions' obligation to meet the financial services needs of
persons of modest means, and establishes a regulatory structure for
monitoring and evaluating compliance.
In addition, the bill resolves a number of other controversial credit
union issues. It requires NCUA to issue regulations defining
permissible membership and boundaries for community credit unions. It
freezes current NCUA policy on business lending, allowing time for the
Banking Committee to study the issue. And it provides a framework of
safety and soundness regulation for credit unions that is comparable to
that for banks and thrift institutions.
Mr. Speaker, the bill is clearly a compromise. There are some
provisions that are not as strong as I would have liked; there are
others I would not have included. But that is the art of compromise.
H.R. 1151 is not only a fair compromise, it is good public policy.
I believe this legislation is a winner for everyone. It's a clear
winner for the credit unions, since it resolves the issues raised by
the Supreme Court and earlier court decisions. It's a winner for the
banks, since it addresses several controversial NCUA practices and
policies. And, most important, it's a clear winner for America's
consumers.
I urge my House colleagues to suspend the rules and pass H.R. 1151 by
a unanimous vote.
Ms. VELAZQUEZ. Mr. Speaker, I rise in support of H.R. 1151, the
Credit Union Membership Access Act and the millions of Americans who
are members of federal credit unions. Access to financial services and
opportunity is important to low and moderate income communities like
the one I represent. H.R. 1151 ensures that the greatest number of
people can enjoy the benefits offered by the credit union system. I
urge all of you to support this important legislation.
Crest unions are the main source of capital in many communities. In
New York more than 3 million people rely on credit unions and the
credit union system for their basic financial services. The hopes and
dreams of families from the Lower East Side of Manhattan to Greenpoint
in Brooklyn are built with the help of their local credit union. H.R.
1151 allows those hope and dreams to be realized.
Federally chartered credit unions date back to the Depression when
the financial services industry was not able to make small loans to
workers. Whether it is buying a new house or sending children to
college, credit unions are still often able to meet their customers'
needs at a lower cost than other financial services institutions. In
fact, millions of customers are still attracted to credit unions
because of low fees and good rates on loans and savings. Consumers must
continue to have that viable choice.
Yet, after a Supreme Court ruling that narrowed the field of credit
union membership, the fate of thousands of members hangs in the
balance. Only by clarifying the definition of the membership provisions
of the Federal Credit Union Act, can we ensure that all credit unions
continue to serve their customers. Join me in passing the Credit Union
Membership Access Act and make sure that we provide all people the
right to chose their financial services institution.
On behalf of New York's 700 credit unions and their 3.5 million
members I urge all of you to support H.R. 1151, the Credit Union
Membership Access Act.
Mr. ROYCE. Mr. Speaker, since their establishment in the early 1990s,
credit unions have played a critical role in our economy by providing
their members with a source of affordable credit. The value of credit
unions is evidenced by the millions of American consumers who have
selected them as their financial institution of choice.
This ability to choose was recently challenged by a narrow 5-4
Supreme Court decision, which jeopardizes the current membership status
of millions of credit union members, and the right of all consumers to
choose their financial institution.
I am committed to preserve and protect this right, which is why I am
a cosponsor of H.R. 1151, the ``Credit Union Membership Access Act.'' I
am pleased that this legislation was favorably reported out of the
Banking Committee, of which I am a member, on March 26, 1998. I
continue to support this legislation and urge my colleagues to vote for
financial passage of H.R. 1151 when it is considered by the House of
Representatives today.
Mr. LEACH. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The questions is on the motion offered by
the gentleman from Iowa (Mr. Leach) that the House suspend the rules
and pass the bill, H.R. 1151, as amended.
The question was taken.
Mr. FILNER. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 411,
nays 8, not voting 11, as follows:
[Roll No. 92]
YEAS--411
Abercrombie
Ackerman
Aderholt
Allen
Andrews
Archer
Armey
Baesler
Baker
Baldacci
Ballenger
Barcia
Barr
Barrett (NE)
Barrett (WI)
Bartlett
Bass
Bateman
Becerra
Bentsen
Bereuter
Berman
Berry
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Borski
Boswell
Boucher
Boyd
Brady
Brown (CA)
Brown (FL)
Brown (OH)
Bryant
Bunning
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Capps
Cardin
Carson
Castle
Chabot
Chambliss
Chenoweth
Christensen
Clay
Clayton
Clement
Clyburn
Coble
Coburn
Collins
Combest
Conyers
Cook
Cooksey
Costello
Cox
Coyne
Cramer
Crane
Crapo
Cubin
Cummings
Cunningham
Danner
Davis (FL)
Davis (IL)
Davis (VA)
Deal
DeFazio
DeGette
Delahunt
DeLauro
DeLay
Deutsch
Diaz-Balart
Dickey
Dicks
Dingell
Dixon
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Ensign
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Fattah
Fawell
Fazio
Filner
Foley
Forbes
Ford
Fossella
Fowler
Fox
Frank (MA)
Franks (NJ)
Frelinghuysen
Frost
Furse
Gallegly
Ganske
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gilman
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hamilton
Hansen
Harman
Hastert
Hastings (FL)
Hastings (WA)
Hayworth
Hefley
Hefner
Herger
Hill
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoekstra
Holden
Hooley
Horn
Houghton
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Inglis
Istook
Jackson (IL)
Jackson-Lee (TX)
Jenkins
John
Johnson (CT)
Johnson (WI)
Johnson, E. B.
Johnson, Sam
Jones
Kanjorski
Kaptur
Kasich
Kelly
Kennedy (RI)
Kennelly
Kildee
Kilpatrick
Kim
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Knollenberg
Kolbe
Kucinich
LaFalce
LaHood
Lampson
Lantos
Largent
Latham
LaTourette
Lazio
Leach
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
Livingston
LoBiondo
Lofgren
Lowey
Lucas
Luther
Maloney (CT)
Maloney (NY)
Manton
Manzullo
Markey
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDade
McDermott
McGovern
McHale
McHugh
McInnis
McIntosh
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Metcalf
Mica
Millender-McDonald
Miller (CA)
Miller (FL)
Minge
Mink
Moakley
Mollohan
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Neal
Nethercutt
Neumann
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Owens
Oxley
Packard
Pallone
Pappas
Parker
Pascrell
Pastor
Pease
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Poshard
Price (NC)
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Redmond
Regula
Reyes
Riggs
Riley
Rivers
Rodriguez
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Rothman
Roukema
Roybal-Allard
[[Page H1885]]
Rush
Ryun
Sabo
Salmon
Sanchez
Sanders
Sandlin
Sanford
Sawyer
Saxton
Scarborough
Schaffer, Bob
Schumer
Scott
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Shimkus
Shuster
Sisisky
Skaggs
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith, Adam
Smith, Linda
Snowbarger
Snyder
Solomon
Souder
Spence
Spratt
Stabenow
Stark
Stearns
Stenholm
Stokes
Strickland
Stump
Stupak
Sununu
Talent
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Thomas
Thompson
Thornberry
Thune
Thurman
Tiahrt
Tierney
Torres
Towns
Traficant
Turner
Upton
Velazquez
Vento
Visclosky
Walsh
Wamp
Watt (NC)
Watts (OK)
Waxman
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
White
Whitfield
Wicker
Wise
Wolf
Woolsey
Wynn
Yates
Young (AK)
Young (FL)
NAYS--8
Bachus
Barton
Gillmor
Hostettler
Paul
Paxon
Schaefer, Dan
Watkins
NOT VOTING--11
Cannon
Condit
Gonzalez
Jefferson
Kennedy (MA)
Klug
Payne
Rangel
Royce
Smith (OR)
Waters
{time} 1336
Mr. PAXON and Mr. BARTON of Texas changed their vote from ``yea'' to
``nay.''
Messrs. DOYLE, HEFNER, CHRISTENSEN and MEEHAN changed their vote from
``nay'' to ``yea.''
So (two-thirds having voted in favor thereof) the rules were
suspended and the bill, as amended, was passed.
The title of the bill was amended so as to read: ``A bill to amend
the Federal Credit Union Act to clarify existing law with regard to the
field of membership of Federal credit unions, to preserve the integrity
and purpose of federal credit unions, to enhance supervisory oversight
of insured credit unions, and for other purposes.''
A motion to reconsider was laid on the table.
____________________