Eugene A. Ludwig will go down in history as one of the best comptrollers of the currency. Politicians have labeled him the "rogue regulator." They have accused him of usurping congressional prerogatives and even of trampling the Constitution.

Politicians have been debating financial modernization legislation for decades with little to show for it-burgeoning campaign coffers aside. Mr. Ludwig decided to do something about it before banks became irrelevant in the financial marketplace.

He took steps to enhance the ability of banks to compete. Special interest groups, fearing competition, contested his every move.

At last count, the "rogue regulator's" actions had been upheld in four unanimous Supreme Court decisions.

Congress envisioned in 1934 that credit unions would be formed among small groups of people having a "common bond"-people working for the same company or living in the same community. It has granted credit unions special privileges-exemption from taxation and the Community Reinvestment Act being among the most special.

During the 1980s the National Credit Union Administration decided it liked the part about special privileges, but bristled at the notion that credit unions should be inconvenienced by the common bond requirement. It authorized credit unions to expand throughout the nation among many disparate occupational groups.

The AT&T credit union, formed in 1952 to serve the "employees of the radio shops of Western Electric Co. who work in North Carolina," grew to more than 112,000 members in 150 unrelated occupational groups in 50 states. It remains exempt from taxation and the CRA.

Unfortunately for the AT&T credit union and the NCUA, the Supreme Court has declared that they were clearly violating the law. The "rogue regulator" turned out to be not the comptroller, but the NCUA.

If you're thinking that the politicians are now miffed at the NCUA instead of the comptroller, you need to take a course in Washington-style politics. The NCUA has served up a delicious political stew, and the politicians are drooling over it.

Senate Banking Committee Chairman Alfonse D'Amato declared, "As a strong supporter of consumer choice and credit unions, I believe Congress should and will enact legislation to restore the basic right of Americans to join credit unions."

When, you might be wondering, was the Bill of Rights amended to include the inalienable right to join credit unions? And who or what is precluding Americans from joining them?

House Speaker Newt Gingrich declared his support for overturning the Supreme Court's decision, saying, "The reason I'm doing this is because I believe in decentralization, I believe in community-level activism, I believe in local folks helping local folks."

Actually, I also believe in those things, but I haven't the faintest notion what they have to do with the credit union debate.

More relevant is my belief that government policies should be fair. How is it fair to thousands of community banks to be forced to compete with huge, federally insured, multistate credit unions that do not pay taxes and are not regulated like banks?

Credit union customers today are hardly disadvantaged. They have higher incomes, more education, and greater home ownership than the general population.

Before Congress sheds too many tears for the credit unions, it should consider the implications of allowing tax-exempt credit unions to roam freely about the financial services landscape. Keep the tax exemption without a meaningful common bond requirement and the credit union "movement" would probably become a stampede.

Indeed, if I were running a bank I'd consider sponsoring my very own tax-exempt credit union. Banks have been successful offering annuities and mutual funds. I'm sure they will be able to figure out how to earn fee income by offering credit union services. It beats losing the customer relationship altogether.

The public would be better served if congressional leaders spent less time making speeches about "rogue regulators" and the inalienable right to join credit unions and more time contemplating the ramifications of their legislative initiatives.

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