[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.

                          ____________________