Sen. Lauch Faircloth has asked the General Accounting Office to investigate whether federal credit unions are hurting bank profits in his home state of North Carolina.
"A critical question is whether the growth of credit unions with multiple common bonds is adversely affecting for-profit federally insured institutions," the Republican member of the Senate Banking Committee wrote in a letter to GAO.
Sen. Faircloth's request was prompted by a lawsuit pitting five Tarheel State banks against AT&T Federal Credit Union, Winston-Salem, N.C. A federal appeals court on July 30, 1996, barred 3,600 occupation-based federal credit unions from accepting members from unrelated companies. The case has been appealed to the Supreme Court, which has scheduled oral arguments for Oct. 6.
In the July 22 letter, the lawmaker asked GAO for a list of all North Carolina banks and thrifts in existence since 1990. Sen. Faircloth also requested the deposit, asset, and retail customer growth of these institutions and AT&T Federal during the last seven years. In addition, the lawmaker asked for profit and stock prices for each year since 1990. The congressional watchdog agency will compare these figures with national averages.
Separately, lawmakers and credit union industry representatives announced Wednesday that Rep. Vic Fazio, D-Calif., has become the 100th co- sponsor of a House bill that would overturn last year's appeals court decision.