Rep. Paul Kanjorski, the Pennsylvania Democrat widely credited for his role in co-sponsoring the historic Credit Union Membership Access Act in 1997-98, expressed strong reservations about how language that was inserted into that bill is being used by those converting credit unions to banks.
Kanjorski indicated he strongly opposes the trend toward conversion, which he referred to as a "raiding of assets."
"The reality is almost any smart lawyer or consultant can get on the gravy train. The accumulated assets are being diverted to the interests of selfish people who put the (CU) movement on to change the structure," Kanjorski said during congressional hearings. "We have many sophisticated raiders out there who see these pigeons out there. The temptation to sell out your fiduciary relationship probably becomes high."
During testimony by the witness for America's Community Bankers, the Pennsylvania Democrat pressed the CEO of a mutual savings bank that had converted from a credit union charter about how many members voted on the conversion, with the CEO conceding it was likely that fewer than 20% participated in the decision.
Kanjorski also added for the record that the language that was added to the Credit Union Membership Access Act of 1998 making it easier for CUs to convert were added "at 11:30 at night" with no discussion and accepted for the sake of keeping alive legislation critical to the CU movement's survival.
That language changed requirements to convert charters from a "majority of members" to a "majority of voters."
