WASHINGTON – Ten years ago today, the U.S. Supreme Court put the nation’s credit unions in jeopardy when it threw out a 16-year-old NCUA regulation allowing credit unions to serve multiple common bonds–instead of the single common bond mandated under the Federal CU Act.
The ruling, announced to a hushed crowd of 4,000 at CUNA’s annual Government Affairs Conference, put into motion a national grassroots campaign to overturn the High Court with legislation grandfathering NCUA’s multiple groups policy–that became known as HR 1151, the Credit Union Membership Access Act.
Ironically, the court ruling encouraged the majority of the nation’s largest credit unions to opt instead for community-based charters, displacing small banks, in many cases, as the community financial institution.
Even still, the elimination of the multiple groups policy could have meant doom for many credit unions that had branched out from failing rust belt and other troubled corporate sponsors.
“I think most of us realized the court decision put the entire credit union movement at risk; and something had to be done about it,” Rep. Paul Kanjorski, the Pennsylvania Democrat who drafted HR 1151 and shepherded it to final passage, told The Credit Union Journal last week.
“The Court’s decision a decade ago, in an instant, swept away any sort of debate about which path to take in strategy and tactics–by making it clear we had to go to Congress and change the law,” said CUNA President Dan Mica, who led the lobbying effort for HR 1151. “If we did not, millions of Americans would have been thrown out of credit unions or denied credit union service.
“It was a grim day when the decision was announced,” said Mica, of the silenced crowd at the GAC, “but it led to a joyous day just six months later when HR 1151 was signed into law by President Clinton.
