The 15th Anniversary of the Day That Changed It All

What is the sound of one hand clapping? For Buddhists, it's a thorny, Zen question. For credit unions, it's the Washington Hilton Ballroom on Feb. 24,1998.

That's the day 4,000 or so credit union representatives, who often don't even stop talking among themselves during the invocation, were simultaneously struck dumb by an announcement that the Supreme Court had ruled against them in a case originally brought against the then-AT&T Family FCU (and then NCUA) by five North Carolina banks and the ABA.

By that time the case had been working its way through the courts for eight years and if there was one sure-lock of a bet that winter day it was that the black robes would most definitely vote in favor of the white hats.

Aggressive, Stressful

This week marks the 15th anniversary of that ruling, which launched the most cohesive, stressful, aggressive, creative and successful campaign in the history of U.S. credit unions: the fight to pass the Credit Union Membership Access Act (CUMAA), which for reasons unknown in a community that loves its CU-related acronyms, remains better known as HR 1151.

In this issue, appropriately beginning on page 15, Credit Union Journal has gone to the well and featured some of the photos, marketing materials, campaigns and lobbying endeavors that would follow in the months after the Supreme Court ruled. For those of you who weren't there or are new to credit unions, the court upheld the bankers' argument that the FCU Act had been misinterpreted for the previous 16 years by NCUA and did not allow for multiple membership groups within a field of membership, even though NCUA had granted many such FOM approvals, including to AT&T Family (now known as Truliant).

The banks broke open the champagne, but it was credit unions that were nearly driven to drink. By incredible coincidence the Supreme Court, which had heard arguments in the case in late 2007, issued its ruling at the same time CUNA was hosting its GAC. When the announcement was made in the Hilton's Grand Ballroom you could have heard a PIN-code drop. There was silence. Then incredulousness. Then anger. And then fear that America's credit unions would have to turn to Congress for relief; a Congress where the banks were the 800-pound lobbying gorilla and CUs a largely underfunded and disorganized group of teddy bears.

"I think most of us realized the court decision put the entire credit union movement at risk; and something had to be done about it," said then Rep. Paul Kanjorski, the Pennsylvania Democrat who drafted HR 1151 and shepherded it to final passage.

You often hear talk of historical turning points, but in most cases the turn is slow and gradual. Not so for credit unions in this case. February 1998 was more of a pivot point. After getting up off the ballroom floor and dusting off those white hats, credit unions changed. Anger and fear will do that to you.

When It All Started

February 1998 is when CUNA began to change from being a Midwest trade group from Madison, Wis,. to an inside-the-beltway power player with a backoffice somewhere in the hinterlands. February 1998 is when CUNA and NAFCU realized they better team up, or else. February 1998 is when CUs realized that having all those tens of millions of members could be about more than just a way to calculate league dues.

It wasn't always in the same direction, but credit unions came roaring out of that GAC. The silence was replaced by boisterous cheers when then-House Speaker Newt Gingrich told the meeting he was departing from tradition and signing on as a co-sponsor of the CU-backed legislation.

While CUNA's new CEO, Dan Mica, worked the hallways of Congress using the kind of rare access available to former members of Congress, credit unions hit the roadways in their communities, showing up at every congressman's hometown meetings, at their offices, at church. Petition drives filled CU lobbies and even drive-throughs.

According to one story, a congressman driving to National Airport got a flat tire. The person who pulled over to assist him just happened to ba a credit union lobbyist, and took full advantage of the road-side audience to make his pitch.

Another congressman told of not being able to push open his door because so many letters had been slid through the mail slot (for younger readers, this is actual "mail" in which a physical piece of paper is placed inside what's called an "envelope" and by means of the Postal Service is physically transported to the recipient's actual address).

Roses, And A Few Thorns

Six months later in a Rose Garden ceremony, President Bill Clinton signed HR 1151 into law, culminating one of the great periods in the CU community's history.

Turning points shouldn't be end points, but as CUNA prepares to meet again in 2013 it sometimes feels that way. Actually, it feels like déjà CU all over again. The big issues of discussion and focus this week? The tax exemption and, wait for it, member business lending relief.

Talk about the sound of one hand clapping.

Frank J. Diekmann can be reached at fdiekmann@cujournal.com.