A Year That Changed The Credit Union Community Forever
WEST PALM BEACH, Fla. -
After decades of assuming the "white hat" was all that was needed in Washington, credit unions found their hat being handed to them in several lawsuits over field of membership, with some CUs being denied by regulators any expansions until the litigation was concluded.
The Editors' choices for Top 10 Stories of 1997:
ONE: The Supreme Court agrees to hear what is known as the AT&T Family case, but which is officially the American Bankers Association vs. NCUA. The CU case is first to be heard by U.S. Supreme Court on Oct. 6, 1997. Among those representing credit unions: John Roberts, now Chief Justice of the Supreme Court. CU execs get heavy exposure in the media. A court injunction against FCUs expanding their FOMs is reflected in mid-year data when NCUA reports it approved just 276 apps to expand FOM, down from 2,509 requests one year earlier.
TWO: Credit unions realize how weak they are in Washington, especially when responding to legislation such as that proposed by John LaFalce (D-NY), who proposes a "Credit Union Growth and Improvement Act" that would limit FCUs to a single common bond and apply CRA to CUs larger than $25 million.
THREE: CUNA CEO Dan Mica in first year on job deals with big budget problems. First the card servicing operation collapsed, then he was informed CUNA couldn't make payroll. "And that was my welcome to the movement," recalled Mica.
FOUR: CUs find "angel" to introduce a credit union bill when, at the urging of Speaker Newt Gingrich, Rep. Steven LaTourette introduces Credit Union Membership Access Act, with a group of 18 co-sponsors. Banks cry "conflict of interest" as many of the co-sponsors are CU members. CUs raise $45,000 for Newt Gingrich.
FIVE: FCUs convert to state charters in wake of AT&T Family FCU case; 200 apply by first quarter of 1997.
SIX: CUNA merges its "Operation SECURE" with NAFCU's "Beat Back the Bankers" campaign in a deal brokered by CUNA Mutual CEO Michael Kitchen. Result is formation of Campaign for Consumer Choice, with Larry Blanchard as chair. Later in year credit unions roll out TV ads on CNN and CNN headline news, both 30-second spots. "Who are we? We are you. Seventy-million strong," TV ads say.(Credit unions received an unexpected boost in viewership when the ads were running when Princess Diana dies in an auto accident.)
SEVEN: Yolanda Wheat and Dennis Dollar join the NCUA board, which grows increasingly divided. CUJ reports "festering acrimony" at NCUA board, with Chairman Norman D'Amours at one point unilaterally suggesting adjourning an open meeting. D'Amours' relations with credit unions also deteriorate, and he tells NAFCU annual conference in Vancouver that CUs may win the "battle" over FOM with banks, but lose the war over taxation.
EIGHT: NCUA "hiring scandal" embroils Executive Director Karl Hoyle and Dorothy Foster, along with four regional directors.
NINE: Home banking emerges as more than a curiosity. One vendor told The Credit Union Journal that much of the demand for home banking by credit unions is actually being driven by competitors, not members. MacDill FCU calls it a "sign of the times" when it introduces a "Computer Technology Loan" with a cap of $2,500 to help members buy PCs. Fairwinds FCU offers technology education to members.
TEN: The Credit Union Journal debuts.