Even though they should be, I don't expect to see many people bearing carefully wrapped, crystal-themed gifts around CUNA's GAC this week, despite the fact it's the 15th Anniversary of something historic.
That something historic is "1997," the first of two consecutive years that would change America's credit union community forever, in some ways for the positive and in others, if not for the negative, certainly not ways that are better. Just different. It would be a two-year period of extraordinary challenges for credit unions that, had they not been met, would have meant that Y2K Bug that was still three years away would not have mattered (which, now I think about it, pretty much didn't, unless you were a consultant).
Fifteen years ago, an overflow crowd of some 3,500 jammed the Washington Hilton during CUNA's GAC and roared with approval when it was announced that the Supreme Court would indeed review a district court decision in what was known as the "AT&T Family FCU" case, even though NCUA was the defendant. The high court's ruling came just one day before credit unions headed off to Capitol Hill, and sent them off charged up with the confidence that came in knowing the Supreme Court would finally smite down the bankers and the lower court's ruling that the FCU Act only permitted serving one group of members.
Sound of One Hand Clapping
In an incredible coincidence, the Supreme Court would not issue a ruling until a year later when CUNA was again hosting GAC. That ruling would go in favor of the banks, and would strike dumb the thousands of assembled credit unionists. What is the sound of one hand clapping? I'm pretty sure it was the silence of that Hilton ballroom.
On the cover of Credit Union Journal's Feb. 26, 1997 issue we had a photo of a distinguished looking man in a dark suit that appeared beneath the simple headline, "The Plaintiff." That man was Jim Culbertson, chairman of First National Bank & Trust Co. in Asheboro, N.C. Eight years earlier Mr. Culbertson, upset that a competitor, AT&T Family FCU, had expanded its FOM beyond the sponsor company, placed a phone call to his state bankers association and then the American Bankers Association and convinced them to file suit against the credit union.
"Not in my wildest imagination did I ever think it would grow into a national case," Culbertson told this newspaper.
Kicking Down The Door
As it would turn out, that case and all that would follow weren't in anyone's wildest imaginations, most of all credit unions', who despite meeting every year in the city that money and power and connections built, seemed to be blissfully naïve that riding into town wearing a white hat was all you really ever needed. It wasn't long before they were getting that hat handed to them as they were being shown the door.
CUNA's new CEO in 1997, former congressman Dan Mica, would help change all that, forcing credit unions to stick their toe back into that door and to eventually kick it down. But all that was yet to come.
Appearing next to our story on Mr. Culbertson on that front page was another report detailing the differences between PAC money raised by banks and credit unions. For the preceding election cycle, individual banks and their trade associations had raised $8.5 million; a big step down on the bar chart that accompanied the story that showed CUNA's CULAC and NAFCU's PAC at a combined $844,000 (see an update on PACs in this issue on page 27).
I once heard someone refer to those two years, 1997 and 1998, as a low point for credit unions. They couldn't have been more wrong. Those years marked a creative, philosophical and energetic rebirth. Credit unions had to learn how to tell their own story, but before they could do that, they had to learn to believe in it first. Without belief there can't be passion, and without passion you're just another financial institution looking to squeeze a few more BPs out of a spread. The world hardly needs another one of those.
As the 1997 GAC was being held, CUNA and NAFCU had only recently decided to come together with some others to form the Campaign for Consumer Choice, a first for the two rivals. At the grassroots, state leagues were starting to show some real innovation and imagination. In Arizona, marketers created similar messaging for SEGs and members that their future was "Threatened!" In St. Louis, Anheuser-Busch Employees CU ran ads headlined, "ABECU. Not For Profit. And Definitely Not For Sale." In Michigan, a "Save Our Credit Unions" manual was produced.
Raise A Toast
Bryan Adams had his Summer of '69, credit unions their Summer of '97. Credit unions would reintroduce themselves to consumers, members, Congress, the media and the world with a vigor and creativity not seen since Ed Filene and Roy Bergengren had paired up.
In 2012 the "movement" is back in DC, and ironically the top priority is to lift the cap on business loans that CUs had to swallow to get HR 1151 passed way back when. Fifteen years have passed in the fashion they always do, too quickly. Before this year does, as well, get out your crystal and raise a toast to 1997; may it come around again.
Frank J. Diekmann can be reached at
