Ehrlich on Washington column, March 8, 1998

NEWS FROM Robert L. Ehrlich, Jr. Second Congressional District of Maryland 1 40 7 York Road, Suite 304 Lutherville, Maryland 2 1 093 3 1 5 Cannon House Office Building Washington, D.C. 20515 EHRLICH ON WASHINGTON Week of March 8, 1998 By Congressman Robert L. Ehrlich, Jr. CONGRESS TO ADDRESS ISSUE OF CREDIT UNION MEMBERSHIP Two weeks ago, the Supreme Court issued a sweeping ruling which will ultimately affect the lives of millions of Americans that belong to or are planning to join credit unions. The ruling also sets the stage for Congress to enact legislation which will determine the future of credit unions by establishing new standards which will govern those eligible for credit union membership. Let me give you some background. In 1934, Congress enacted the law which authorizes the chartering of federal credit unions to provide banking services to their members. The law specifically limits membership in credit unions to “groups having a common bond of occupation or association, or to groups within a well-defined neighborhood, community, or rural district.” Through 1982, the “common bond of occupation” requirement was understood to mean that credit union members shared the same employer. During the early 1980s, many corporations were undergoing drastic downsizing of employees. Corporate layoffs, and the subsequent loss of company credit unions members, placed many of these institutions at risk. In 1982, the federal agency which oversees credit unions began interpreting the law in a way which allowed multiple employer groups to constitute a common bond of occupation. Accordingly, many financially-troubled credit unions began accepting individuals