It was an audacious goal, to be sure. Ten million signatures. Ten million Americans signing a petition in support of credit unions. Today it would be the equivalent of getting everyone in Michigan to agree to something. But that was the plan, and if you're going to dream big, well, go big or go home.
But credit unions weren't so much dreaming as they were attempting to avoid a nightmare that to that point had been their record in the courts and Congress. The year was 1997, and as federal credit unions meet this week it seems a fine time to look back and mark the 15th anniversary of the two-year period that forever changed those little financial co-ops in the U.S.
This week NAFCU will host a couple of thousand folks in Nashville, and the home to country music seems as if it would have been the perfect venue in 1997 for a meeting of credit unions, given how they were feelin' their truck had just broke down and their dog had run off with their best girl.
But instead the news in the U.S. that year had apparently gotten so tough that credit unions had decamped for Vancouver, B.C., about as far as you can get from Washington in the continental U.S. and still find a decent meeting facility.
Bankers & Standing
The focus of the meeting that year was anything but the usual menu of funny or inspiring (or inspiringly funny) keynoters and breakouts on spread management. Earlier that year the U.S. Court of Appeals for the D.C. Circuit had not only ruled that the bankers had standing to sue NCUA over its expanded definition of field of membership, but that the agency had violated the Federal Credit Union Act.
Credit unions had appealed that ruling to the Supreme Court; the bankers were urging the court to reject the appeal (ironically, the Supreme Court would later grant CUs their wish and hear the CU arguments, then rule against credit unions).
Then, as summer grew hotter and a new book about a boy named Harry Potter was being introduced, credit unions were warming up to a new idea of their own: a massive petition drive aimed at sending a message to Congress. (Credit unions had a spotty record when it came to petitions. Just six years earlier CUs had sent 6.5 million names on petitions to Congress as part of "Operation Grassroots," even though few people in credit unions and even fewer in Congress had any idea what that "operation" was all about.)
Let's Get Codified!
The still-new Credit Union Campaign for Consumer Choice, the shotgun marriage between CUNA and NAFCU that was leading the nascent response to the threat to the future of U.S. CUs, was-you'll be shocked to remember-divided over exactly what those petitions were supposed to say. Some were urging that the language be narrow and specific and push Congress to codify NCUA's multiple group FOM approvals (because nothing motivates Joe Citizen to sign a petition like the burning desire to see something "codified"), while others wanted the petitions to use broader language that called on Congress to "protect and defend credit unions" (the latter would win out).
Some state leagues weren't waiting. Florida, for instance, had gathered 103,000 signatures on petitions by July of 1997. The league held a press conference at which it had a barrel of peanuts on hand to go with its message, "We may be peanuts to banks, but you'd be nuts to ignore us."
It's been a quick 15 years since NAFCU held its convention on the Burrard Inlet in Vancouver amidst one of the most beautiful urban landscapes in the world, yet it's difficult now to recall just how bizarre the credit union landscape had become at the time.
In Pulaski County Circuit Court in Missouri, for instance, two members-that's right, members-filed suit agaist Mid-Missouri CU claiming it had violated the state's FOM statute when it expanded in 1993 to add nine adjacent counties. MMCU said it was "puzzled" by the litigation, especially since it had been four years since it made the move. The plaintiffs' motivation was less puzzling: one member was a former employee who was managing a local Bank of Crocker; the other was believed to be an attorney's wife. All that may seem a bit silly now, but in those days it was all about who had "standing" to file suit.
The Treasury Department had also launched a much-discussed "study" of credit unions, which was still trying to come to terms with the idea of community charters: in the summer of 1997 NCUA had approved 21 such expansions. That Treasury study and those expanded "fields" led to a warning from then NCUA Chairman Norm D'Amours, himself a former congressman, that credit union expansion might mean soon having something in common with their Canadian hosts-no more tax exemption.
It's A Cliche For A Reason
Proving there's a reason "what goes around, comes around" is in the clichÃ© Hall of Fame, at that 1997 annual meeting NAFCU announced that in 1998 it would be holding its convention in Nashville at the same hotel where they are meeting again this week.
Now in 2012, federal CUs are again on a losing streak in Congress (a decade long and counting), this time on the issue of expanded member business lending.
Maybe someone should start a petition.
Frank J. Diekmann can be reached at email@example.com.