[Congressional Record Volume 144, Number 59 (Tuesday, May 12, 1998)]
[Senate]
[Pages S4740-S4741]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        CREDIT UNION MEMBERSHIP

 Mr. ABRAHAM. Mr. President, I rise to support legislation 
protecting the 70 million Americans who belong to credit unions from 
being stripped of their financial security and to allow tens of 
millions of others, who currently are denied access to a credit union, 
to become members.
  One of the most important financial assets our country has, Mr. 
President, is our extensive system of not-for-profit, community-based 
credit unions. Credit unions provide unique and valuable services to 
members, most of whom work for small businesses. Credit unions offer 
their members lower costs, higher returns, lower loan rates and greater 
convenience. They nonetheless provide important benefits to their 
members and crucial competition in the financial services marketplace.
  But credit unions have been put in significant danger by a recent 
Supreme Court decision. That Court ruled that attempts by the National 
Credit Union Administration during the Reagan Administration to more 
broadly interpret the 1982 ``common bond'' requirement for membership 
are beyond the scope of original intent.
  The Court's interpretation of this requirement could result in over 
10 million Americans being forced out of their credit unions. It also 
means that small businesses with fewer than 500 employees--the engine 
of economic growth in this country--are barred from offering credit 
union memberships to their employees.
  Clearly, in the wake of the Court's ruling, the laws pertaining to 
credit union membership must be modified. Credit Unions have a proud 
history of providing important benefits without cost to either 
businesses or taxpayers. In Michigan alone 4 million people avail 
themselves of these benefits, and they should be protected against 
unfair limitations on credit union membership. What is more, the growth 
of credit unions in America has coincided with a significant expansion 
of earnings for community bankers, another crucial financial services 
asset for our people and our economy. As reported by the ABA Banking 
Journal's Annual Community Banking Earnings Report, the vast majority 
of community bankers believe that earnings will continue expanding, 
seeing no threat from credit union expansion.
  There is no reason, in my view, to see credit union expansion as 
anything but a significant benefit for our people and our economy. That 
is why I am supporting legislation authored by Senator D'Amato, 
modelled after H.R. 1151, legislation that already has passed the 
House. This legislation will grant credit unions authority to add 
Select Employee Groups of 3,000 or less to their membership.
  This legislation also sets a moderate cap on commercial loans in the 
interest of fairness and consensus. In my opinion, such a requirement 
was necessary to respond to some of the concerns raised in response to 
extended membership.
  The critical issue, Mr. President, is whether we are going to allow 
credit unions to continue to provide important services at reasonable 
cost to a

[[Page S4741]]

vast and growing number of Americans, or impose new regulatory burdens 
on one of our economy's most important assets. I believe it is crucial 
that we save credit unions from undue limitations, and that this 
legislation will achieve that goal without harming any other industry. 
I urge my colleagues to support this legislation.

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