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Committee on Financial Services

United States House of Representatives

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REMARKS BY REP. CHRIS CANNON (R-UTAH)
BEFORE THE HOUSE BANKING COMMITTEE
March 11, 1998

 

Chairman Leach, members of the Committee, my name is Chris Cannon and I represent Utah’s Third Congressional District. I am pleased to be here today to testify on the credit union issue. According to data prepared by the credit union industry, my congressional district has one of the largest populations of credit union members of any district in the country. As a longtime credit union member, I am included in that number.

As those of us present know, the U.S. Supreme Court’s ruling on the issue of credit union field of membership was a significant event. The next day, U.S.A. Today led with the Court’s decision, capped by the headline: Court curbs credit unions; Multifirm membership called illegal by justices.

This and similar news stories has caused concern among many of the nearly 70 million Americans who are members of credit unions. If your office is like mine, the phones began ringing, faxes started flying, e-mail zipped in and letters began arriving. Most were seeking an answer to a single question: "Congressman, can I still keep my credit union account?"

I suspect the same experience has been repeated all over Capitol Hill. U.S. credit union members are unsure and unsettled. And, as the debate over credit union reform begins here in the Banking Committee, those concerns will escalate.

And with good reason. As each member of this Committee knows, the Supreme Court sent the AT&T case back to the district court in North Carolina. While the banks and the credit unions both claim that current credit union members are not at risk from the Supreme Court decision, the final resolution is in the hands of a district court judge. Clearly, the Supreme Court decision supports the proposition that, under current law, a credit union’s membership may not consist of multiple common bonds. While I doubt that the district court would go so far as to divest current members, the very potential has an unnerving effect on millions of Americans.

It is appropriate for Congress to act to calm these concerns. Careful and narrowly focused congressional attention could protect current credit union members and provide a safety net to millions of our constituents, while allowing the greater debate to go forward within this committee and within Congress.

This is why I introduced HR 3265. The bill simply provides that anyone who belonged to a credit union as of the Supreme Court’s February 25th decision is grandfathered-in as a member -- regardless of pending court decisions or congressional action toward reform. HR 3265 provides absolute protection to current credit union members.

Moreover, HR 3265 codifies and puts into statute what is probably the only area of agreement between credit unions and banks: that current members should not be adversely affected by any pending or potential changes. In fact, HR 3265 could be the first step toward diminishing the animosity between the parties on this issue.

HR 3265 is a narrow bill -- a solution-oriented proposal which would calm the fears of the public in what should be a non-controversial manner. I am pleased to announce that the concept is picking up steam. Currently, HR 3265 has 45 cosponsors: Republicans, Democrats, pro-bank representatives and Members who are staunchly pro-credit union.

Finally, let me re-emphasize that I do not see HR 3265 as the end of the debate on the scope of credit union membership, but rather a means to that end. By removing the emotional question of what impact any congressional reforms will have on those currently enrolled in credit unions, this Committee can create a more neutral, less hostile playing field -- free of demagoguery and horror stories by either side.

A congressional resolution to the credit union issue may or may not fit into the broader context of financial reform pending before this Committee. Regardless, I believe that HR 3265 could adequately stand alone, sending a clear message to the 10-20 million credit union members put in jeopardy by the Court’s decision that they need not fear.

In that context, I would encourage the Committee to look closely at HR 3265. I look forward to working with you on this issue in the future.

Thank you, Mr. Chairman.



 

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