Thursday, April 2, 1998 | 10:11 a.m.
Nevada's representatives in Congress knew legislation supporting credit unions would breeze through the House despite bank industry lobbying efforts. That's because the public overwhelmingly backed the proposal.
Banking industry officials, stung by the huge defeat, promise a fight in the Senate when the legislation gets there.
Reps. John Ensign and Jim Gibbons said they received thousands of phone calls and messages from constituents supporting the Credit Union Membership Access Act, which was approved in the House on Wednesday in a 411-8 vote.
"I knew it was going to sweep through," Ensign said. "We've got about 340,000 credit union members in our state. You're talking about a lot of people who have gotten lower interest loans and have their savings in credit unions."
Ensign said his opinion on the issue was developed through his own personal experience with credit unions. He said he was a member of the old Del Webb Credit Union that supported the Phoenix-based company when it was more involved in the gaming industry years ago.
"We received a number of calls from both the banks and the credit unions on this bill as did every member of Congress," Gibbons said. "When it went to a vote, we determined that the legislation was not detrimental to banking and it was supportive of credit union membership."
Gibbons said that with such an overwhelming vote, he expects the measure "not just to go over to the Senate, but to fly over to the Senate with a great deal of speed, urgency and support."
Nevada's two Democratic senators, Richard Bryan and Harry Reid, have favored credit union legislation in the past.
The legislation allows credit unions to continue to include more than one group in their memberships and would supersede a Supreme Court ruling that had been sought by members of the banking industry.
Portraying the relationship between credit unions and the banks as a David-and-Goliath struggle, credit union officials supporting the legislation said they have only been able to compete with banks by offering lower-cost loans and services with more favorable rates for their members. Credit unions also get tax breaks, an advantage banks say is unfair.
The banking industry wasn't happy with the House vote. In a statement issued by the American Banking Association, William McConnell, president of the group, criticized the vote and promised a fight.
"We are extremely disappointed with the House's passage of H.R. 1151," said McConnell, who is chairman and chief executive officer of Park National Corp. in Newark, Ohio. "It appears that representatives were stampeded by a massive and expensive misinformation campaign by the credit union lobby, which falsely led consumers and some members of Congress to believe that current credit union members might lose their accounts. We will go all out to oppose this bill and achieve a more balanced product in the Senate."
McConnell said the House bill would create a new entitlement program.
"To qualify, you wouldn't have to be needy," he said. "In fact, anyone, anywhere, including commercial firms, would be able to dip their hand into Uncle Sam's pocket. Before we know it, the costs of corporate welfare for large, highly profitable credit union conglomerates would be out of control. The credit union industry's tax subsidy already is nearly $1 billion per year; now it appears the sky's the limit."
Gibbons said the legislation wasn't intended to create a new a battleground between the two groups.
"Nobody wants to pit banks against credit unions. That's not the issue here and that's not what it's all about," Gibbons said. "It gets down to that you don't have to be antibanking to be pro-credit union or anticredit union to be pro-banking."
Ensign and Gibbons, both Republicans, said they received higher than usual constituent response on the issue. Gibbons said that he received more than 1,000 calls supportive of the credit union cause in his office, which normally receives 200 to 500 calls a day. He said he also received comments at town halls in the state and in correspondence.
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