To the Editor:

Despite Elizabeth Schiltz's suggestion in her Aug. 19 commentary ("Credit Union Lobbyists' Show Kept Big Issues Offscreen") that credit unions should win an Oscar, the historic passage of the Credit Union Membership Access Act (HR 1151) was not accomplished by putting on an act.

It was accomplished by 74 million credit union members, volunteers, and credit union professionals from all congressional districts.

We also gained a groundswell of support from a coalition of over 2,000 small businesses and bipartisan advocacy groups, from the Consumer Federation of America to Americans for Tax Reform.

Genuine grassroots advocacy on this scale simply cannot be staged. Millions of credit union supporters voiced their heartfelt support for the only not-for-profit, consumer-owned alternative to banks. There was nothing "put on" about it.

Even a cursory review of the congressional testimony and media statements show the entire premise of the commentary was ill-informed.

Ms. Schiltz began by panning the Credit Union Campaign for Consumer Choice for focusing on what she called a "nonissue." In fact, credit unions focused on the only issue: freedom of financial choice. The right to join a credit union was the only issue at stake in the landmark lawsuit brought to the Supreme Court.

In Congress, banks and their interest groups tried constantly to deflect the attention to outside issues-taxation and CRA-that were completely extraneous to the legal case that moved Congress to write a new law.

To declare that taxation and CRA did not even come up for debate shows Ms. Schiltz did not even perform a cursory review of the banks' testimony and media statements.

There's only one reason taxation and CRA are not in the new law: They don't apply to credit unions.

Why the tax exemption?

Credit unions are not-for-profit cooperatives owned by all depositors (called members). Any excess income goes back to the members, who pay taxes on their dividends in the same way bank stockholders pay taxes on their dividends.

Yet the banking industry tried to sell Congress that increasing credit union membership would cost the federal government between $500 million and $1 billion in tax revenue over five years.

The Office of Management and Budget countered that HR 1151 will have no negative effect on the federal budget.

And the Congressional Budget Office noted HR 1151 would actually increase credit union payments to the National Credit Union Share Insurance Fund by $628 million over the next five years-reducing the government's net outlays by that amount.

Why no CRA?

The Community Reinvestment Act was enacted to require banks and savings and loans to keep more money in local communities.

The facts demonstrated that many were ignoring low-income areas in order to make loans to foreign governments and other places they thought would be more profitable.

Credit unions were never part of this problem. In fact, this type of lending is not possible for credit unions since they can only loan to their members.

It is true that credit union member households earn more than nonmember households. This is hardly surprising since 75% of credit union membership fields are based on employment. Credit union members are more likely to be working full-time and living in a dual-income household. Credit union members are less likely to be retired than nonmembers.

What's more, according to the American Bankers Association's own Gallup survey, the average household income for people who use a bank as their primary financial institution is about $5,000 higher than the average for those who use a credit union as their primary financial institution.

A recent Federal Reserve survey of consumer finances reveals that people who use only a bank have annual household incomes of nearly $10,000 more than those who only use a credit union.

Credit unions do provide service to Americans who need it most. Credit union denial rates for people of all races are lower than denial rates at for-profit lenders.

For example, the mortgage denial rate for African-Americans at for- profit lenders, according to Home Mortgage Disclosure Act data, was 28%. This rate was 18% at credit unions.

At Navy Federal Credit Union, the world's largest, the denial rate for African-Americans was only 6%.

Even bankers admit that consumers receive a better deal at credit unions. But with a scant 2% of the U.S. mortgage loan market, credit unions are only a small player. Yet banks wish we would only get smaller.

Through HR 1151, credit unions accepted tightened restrictions on membership and lending authority, plus the most stringent safety and soundness regulations in the industry.

What began as a one-paragraph bill expanded to more than 100 pages, which will require promulgation of many new regulations.

These were accepted in order to win on the only real issue: restoring the right of working Americans to decide on their own where they save and borrow.

If that deserves an Oscar, 74 million American credit union members gladly accept.

Daniel A. Mica

President, chief executive officer,Credit Union National AssociationWashington

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