In a preview of next year's lobbying, the national trade groups representing banks and credit unions are duking it out on Capitol Hill.
The American Bankers Association is telling lawmakers that even if the Supreme Court decided to limit membership in occupation-based credit unions, current members would not lose their accounts.
"Expansionist credit unions are unduly and falsely attempting to scare credit union customers into believing they may lose their accounts," wrote Edward L. Yingling, the group's deputy executive vice president.
"We urge you not to buy into the 'Chicken Little' scenario being spread by credit union trade associations."
Credit unions have been pushing for a bill making it explicitly legal to serve employees of more than one company.
In fact, if the banking industry wins the common bond case, Mr. Yingling said, the ABA wants only companies added since July 1996 to be divested. (That's when a federal appeals court ruled that members of an occupation- based credit union must share a single, common bond.)
In addition, members added after July 1996 would have to be divested only if the employees work for a company large enough to form its own credit union, Mr. Yingling said. He would not put a number on this size limit.
Also, Mr. Yingling told lawmakers that any institution affected by the ruling could become a state credit union, a federal community credit union, or a federal mutual thrift. "Current credit union customers have nothing to fear from a decision in favor of the ABA," Mr. Yingling said in the memo, which was sent last week to every member of Congress.
Credit union industry officials were infuriated by the memo, and accused the ABA of misleading Congress. "I am just astounded," said Daniel Mica, president of the Credit Union National Association. "They call us Chicken Little, but they are the ones who have laid an egg. Their letter is blatantly contrary to what they have told the courts."
Mr. Mica said he is preparing a response that will be distributed this week to every member of Congress. The ABA's memo, he said, implies that credit unions have lost every common bond case, when in fact they won several times at the district court level. "This verges on the most blatant, hypocritical act I have ever seen by a national trade association," he said
Dismissing the complaints, Mr. Yingling said: "The memo is factually correct. He apparently just can't read plain English."
