BY JEFF McKINNEY
The Cincinnati Enquirer
Credit unions are relying on Congress to pass a law that would allow them to expand their membership because their future survival depends on it, an industry executive said Wednesday.
It would be very difficult for federally chartered credit unions to continue to grow unless the Senate backs a vote by the House of Representatives that would give credit unions authority to expand their membership, said Daniel Mica, president of the Credit Union National Association, the industry's trade group.
The House vote was a victory because it softened a blow that credit unions suffered in February, when the Supreme Court ruled that they could no longer take members from outside a single group or company.
Now, Mr. Mica said, credit union executives are lobbying hard to get Senate support because without such action credit unions' ability to increase their assets, expand their membership and determine what groups or institutions they serve would be limited greatly.
Those are some of the comments Mr. Mica will make when he visits Cincinnati today. He will be here to launch the Ohio Credit Union League's 64th Annual Convention, which is expected to be attended by more than 1,500 credit union representatives at the Albert B. Sabin Convention Center.
Several industry executives will join Mr. Mica to talk about major issues confronting the business. Topics to be discussed will range from how to get computer software programmed for the year 2000 to competing in a changing financial-services industry.
Banks and credits unions have been fighting for years over who can belong to credit The non-profit agencies provide people with checking accounts, credit cards, loans and other financial services. Mr. Mica said that without help from Congress some credit unions would have to dramatically change how they operate and some could be forced to go out of business.
The House passed legislation that would allow credit unions to accept outside members as long as they come from companies or groups with fewer than 3,000 people. Credit unions also could apply for exceptions to encompass larger groups.
For their part, credit unions in recent months have been mobilizing their more than 70 million members by encouraging them to call their congressional representatives for support.
The congressional battle primarily pits credit unions against small banks across the country. Many large banks, such as Chase Manhattan and Citicorp, are not as worried about competition from credit unions.
Mr. Mica said there about 62 million Americans who work for small businesses with 500 or fewer employees, and bankers want Congress to limit those businesses from starting their own credit unions or joining existing credit unions that serve selected employee groups.
"There are no immediate threats to credit unions," Mr. Mica said. "But the long-term prognosis could be devastating if bankers get their way."
