Video News Release Coming Monday About Credit Unions and Consumer Choice
May 9, 1997

On Monday, May 12, the Credit Union Campaign for Consumer Choice is planning a national press conference across from the Supreme Court. The event will highlight the Supreme Court briefs filed by consumer groups and small businesses in support of Americans' right to own and belong to a credit union. The Supreme Court will review the appeal of a lawsuit filed by bankers that resulted in millions of consumers being restricted from joining federal credit unions.

By Monday afternoon, you will receive a VNR — a fast-paced package that will include several minutes of video footage and sound bites from the press conference, complete with voice-over narration.

This issue affects 152 federal credit unions in Indiana and hundreds of thousands of Hoosiers whose right to choose where they conduct their financial business is at stake with this upcoming Supreme Court ruling. So we encourage you to download the footage and use it as part of your news broadcast. Along with this fax, we're sending some background information about this issue to help you cover it. If you need additional information, would like to interview Indiana Credit Union League President John McKenzie, or need assistance in contacting a credit union official in your area, please call Cindy Dashnaw or Wendy Schwantes at (317) 594-5345.

Here are more details about the national press conference:

Lead speaker:

• Steve Brobeck, Executive Director, Consumer Federation of America

Other scheduled speakers:

• Alex Hultgren, Executive Director, Campus Credit Union Council

• Jimmie Lee Wood, member, AT&T Family FCU (the credit union involved in the lawsuit that resulted in an injunction against the National Credit Union Administration barring the regulator from allowing credit unions to accept multiple employee groups into their fields of membership). Wood tells the story of when his daughter broke her neck, local banks wouldn't give him a loan for her medical expenses. The credit union practically saved his daughter's life.

Background Information: Credit Unions and Consumer Choice

Consumer groups and small businesses have filed briefs with the U.S. Supreme Court in support of consumers' right to choose where they will conduct their financial business.

(Representatives of these groups will appear in the VNR.)

The Supreme Court will review the credit union movement's appeal of a 1996 court decision that severely restricts membership in federally chartered credit unions.

“We're very happy that the Supreme Court chose to hear the field-of-membership case. We're hopeful it will decide the case in our favor so that consumers continue to have the option of joining a member-owned, not-for-profit credit union as an alternative to a for-profit bank,” said John McKenzie, president of the Indiana Credit Union League, the trade association serving 272 Indiana credit unions.

Over the past several years, the banking industry has filed numerous lawsuits against federal credit unions that seek to limit who can and cannot join credit unions. The courts predominantly have ruled in favor of credit unions. Last year, however, the banks won a lawsuit that prohibits federal credit unions from serving multiple employee groups. (The lawsuit involved AT&T Family FCU. A member of that credit union will appear in the VNR.) As a result, millions of people who work for companies that are too small to support their own credit union or are not already within a credit union's field of membership no longer have the option of joining a federal credit union.

The credit union industry appealed the decision to the Supreme Court. The court is expected to rule on the case sometime during its next term, which begins in October.

“The bankers initiated these lawsuits in an attempt to eliminate credit unions as an option for millions of Americans,” McKenzie said. “Clearly, a bank monopoly is not in the best interest of consumers. If their right to choose is taken away, people will have no option except to pay higher rates and fees at banks at a time when banks are experiencing record profits exceeding $50 billion annually.”

As credit unions wait for the Supreme Court's decision, they also are seeking a legislative solution to the membership issue. On March 20, the Credit Union Membership Access Act, H.R. 1151, was introduced in Congress. One of the co-sponsors was Indiana Rep. Dan Burton, R-6. This legislation would amend the Federal Credit Union Act to clarify a federal credit union's right to serve multiple employee groups, even if those groups do not share the same occupational or associational common bond as the credit union's original sponsor.

The change also would reaffirm a 15-year-old regulatory policy that permits employee groups that are too small to start their own credit union to join existing credit unions.

“We aren't asking for any new powers with this legislation. We simply want to amend the Federal Credit Union Act to better reflect Congress' intent when it passed the law in 1934,” McKenzie said. “People should not be denied access to federal credit unions simply because they work for organizations that are too small to support their own.”

This issue does not affect Indiana's state-chartered credit unions because the Indiana Credit Union Act already permits them to serve multiple employee groups.

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