WASHINGTON-When the then-Speaker of the House asked a newly minted member of the House Banking Committee (as it was still called back then) to co-sponsor a credit union bill, it was nothing less than a matter of life and death-both for the CU community and the young lawmaker's career.
"The Credit Union Membership Access Act was brought to me by Speaker Newt Gingrich. He wanted me to carry this ball, and it was not without controversy. Looking back, I was like 'Mikey' in those old cereal commercials," the now-retired U.S. Rep. Steve LaTourette recalled. "Right after I agreed to help shepherd this bill through, I got a call from a banker in Cleveland, who said, 'You've just lost your last friend, you're finished.'"
But that's not what the history books show. As the fight for HR 1151 marks its 15th anniversary, LaTourette (R-OH) would also go on to serve in Congress for another 15 years before choosing to retire on his own terms. The banker who threatened him? He lost his job not two years later.
The year was 1997 and credit unions had been losing in court in a lawsuit filed by the banking industry over the NCUA's interpretation of the Federal Credit Union Act. One single letter, "s," had enormous implications for the financial services market. Did 1934's FCU Act allow for multiple groups within a field of membership, or a single group? NCUA interpreted the rules as allowing for multiple groups. The bankers, beginning with the North Carolina Bankers Association, disagreed, and had filed suit in 1990.
That litigation would work its way through he courts for six years before credit unions lost at the Appeals Court level, and then appealed that decision to the Supreme Court. Although confident the highest court would rule in their favor, credit unions had in 1997 hedged their bets and gotten a bill, HR 1151, introduced in Congress. Although traction on the bill was initially slow, it gained great momentum after the Supreme Court ruled against credit unions in February of 1998.
David & Goliath
"It was a real-life, modern-day story of David and Goliath. The banks had extremely deep pockets and were veterans of the Capitol Hill lobbying scene. Credit unions at that time were just a fledgling lobbying group with very little money and very little experience."
But what they had, they had in spades: people, also known as voters.
"An extraordinary number of people who reached out to members of Congress," LaTourette recollected for Credit Union Journal. "It was a case of deep pockets versus a wealth of highly motivated people."
And the banks, in their arrogance, didn't do themselves any favors, LaTourette added, noting that the restrictive take on FOM that banks were insisting on was "patently unfair," making it all the easier for other members of Congress to sign onto the bill.
'Made A Lot of Friends'
"For me, it was just the second piece of legislation that I helped shepherd through Congress," he related. "I still have the photo of Clinton signing it into law on my wall, along with the special version of Mount Rushmore that some credit union folks put together that's been altered to include [fellow HR 1151 co-sponsor U.S. Rep. Paul] Kanjorski and me.
"I still get a lot of requests for speaking engagements at credit union events across the country," he added. "I made a lot of friends I still have to this day."
The campaign to pass HR 1151 was, LaTourette recalled, "a battle royale," and both sides learned and important lesson: a "wealth of people" can defeat a "wealth of PAC dollars." It's a lesson that bankers have clearly taken to heart, he suggested.
"If the experience 15 years ago was good for credit unions, it did also teach banks that they cannot ignore them," LaTourette said.
And that has proven to be a bit of a thorn in the side of the credit union movement-just look at credit unions' efforts to get the cap on member business lending-a last-minute concession made to get HR 1151 out the door-eliminated, or at least raised. HR 1151 took a scant six months to pass. More than 10 years after credit unions first started seeking MBL cap reform, the effort has gone nowhere.
"The battle fought by credit unions over HR 1151 was so much more robust. I have not seen the same level of passion for member business lending reform," LaTourette said. "And I suppose it is understandable. Member business lending is about expanding a service; HR 1151 was about survival. Before I retired in January, I would hear from maybe four or five credit union people about the member business lending bill, compared to the hundreds and even thousands of people I heard from on HR 1151.
Bankers And MBL Opposition
"Plus, banks made it easier for credit unions back in 1998 because they got greedy, asking for the most restrictive view of field of membership possible, and all along, they're asking credit unions to leave the very same field that banks had already left, areas that the banks themselves weren't interested in serving," he continued. "That's why the banks are fighting MBL reform so hard. They regret the role they played in their own loss over 1151, and they're not about to do it again."
LaTourette isn't about to do it again, either. Like so many lawmakers before him, the retired LaTourette now plans to become a lobbyist, heading up the lobbying arm of the Cleveland-based law firm McDonald Hopkins. Congressional rules don't allow him to lobby his former colleagues in either the House or Senate for one year, but he is free to lobby the Administration, and he can consult and help develop lobbying strategy, as well.
"I want to be a problem-solver," he said. "I want to use what happened in 1151 as an example of something that was considered dead on arrival, and yet we got it done. It really does show the power of the people. It's a textbook example of getting something done against the odds."
