By Ray Birch
Editor’s Note: 2017 marks the 20-year anniversary of a two-year battle in Congress to get the Credit Union Membership Act not just introduced, but passed. It was a historic fight that led to a historic change for America’s credit unions, which were deeply threatened by banker lawsuits and court decisions that had gone against FCUs and how NCUA had interpreted field of membership rules.
To mark the 20th anniversary, CUToday.info has launched a series of stories in which those close to that fight share their recollections of the time and their insights into how it changed credit unions.
WASHINGTON—John McKechnie still recalls when he was working on Capitol Hill in 1997 and 1998 and getting reports from congressional staffers that lobbyists for the banking industry thought of credit unions’ effort to get the Credit Union Membership Access Act passed were “ridiculous.”
When it came to credit unions on the Hill the bankers were “smug” and “dismissive,” he remembers.
But that banker perspective actually was a good thing for credit unions and their fight to have Congress pass what remains better known as HR 1151, according to McKechnie, who was VP of legislative affairs at CUNA two decades ago when credit unions were in the fight of their lives in both the court system and Congress. McKechnie today is a senior partner at the Washington, D.C.-based public policy and advocacy firm Total Spectrum.
Looking back on the years leading up to the two-year fight for HR 1151, McKechnie said credit unions laid the groundwork for the bill’s passage quietly, right under the feet of bankers.
“It was tremendously helpful to us to be underestimated by the banking industry,” said McKechnie.
Credit unions would eventually amass more than 200 co-sponsors for HR 1151—including then Speaker of the House Newt Gingrich, even though Speakers typically don’t sign on to legislation–but when the number hit 100, McKechnie said CUNA held a press event on Capitol Hill.
“I remember hearing that day from a friendly congressional staffer that an ABA lobbyist had stopped by and ridiculed us, laughed at us,” he said.
McKechnie said the news at first made him angry.
“But then I became very pleased that this was the bankers’ attitude. I wanted them to continue to underestimate us. That made me feel good,” said McKechnie. “I think the bank lobby ultimately was very slow to move against HR 1151 and very uninformed about what was really going on. That cost them.”
McKechnie said that the bankers did not pay attention to the relationships credit unions were working to build within Washington and the grassroots support they were mustering in districts across the country.
“We were always involved in grassroots efforts,” said McKechnie. “We worked very hard in the vineyard, so to speak, building a network, making sure that all of our political efforts fit
hand and glove with legislative efforts.”
McKechnie said those efforts had been under way well before HR 1151, before credit unions knew what the “battle was going to be.”
“I think we always knew that we needed to construct a political machine so that when the time came, it would be ready for the fight,” said McKechnie.
McKechnie pointed to an example of that thinking—maybe one of best political moves credit unions have made—when the Georgia CU League cultivated its relationship with Gingrich long before he ascended within Washington’s ranks to become speaker of the House, and a co-sponsor of HR 1151.
“The league got involved in Gingrich’s race for a seat in the House. Here was this guy who wasn’t established yet in Washington,” recalled McKechnie. “But the league got involved in the race—as Gingrich had just faced a couple tough primaries—and they built a relationship with him. They educated him about credit unions and showed him what kind of force we could be politically.”
McKechnie emphasized that credit unions had no inkling of what might transpire in Gingrich’s career when they began supporting him.
“I always said that if we did not cultivate Gingrich as a friend before we needed him, things might have been different in 1998,” said McKechnie. “If he had not laid hands on that bill and co-sponsored it … Speakers of the House rarely sponsor legislation.”
But Gingrich, in McKechnie’s opinion, led the charge for credit unions in gaining sponsors for the bill. McKechnie recalled the February 1998 CUNA Governmental Affairs Conference in Washington when Gingrich rallied support.
“I’ll never forget it, he took the microphone at the GAC and said he was going to co-sponsor the bill,” said McKechnie. “That was an extremely important signal to the Republican majority that it was OK to back this bill.”
McKechnie stressed again how important it was for credit unions to develop a strong political machine before they needed it.
“In the decade leading up to HR 1151, there were not any major political challenges,” said McKechnie. “So the point is that when you find yourself really needing a friend in Washington, that is not the time to try to make one.”
McKechnie recalls that just prior to the vote of HR 1151 in Congress, where it passed by overwhelming majorities, he was sitting in the office of then Senate Banking Committee Chairman Alfonse D'Amato (D-NY).
“I was in the outside part of the banking committee office with a couple people from New York State and D'Amato walked by and said, ‘We’re about to go on the (Senate) floor, so fasten your seat belts.’ That is a very good memory for me. Because I knew if the bill had the support to go to the floor, that we had the votes to get it passed.”
McKechnie said that 20 years ago he felt confidence in the credit union lobby, and that feeling has gotten stronger as time has passed.
“HR 1151 certainly elevated the profile of the credit union political machine, and I think it confirmed what I thought all along, that credit unions could become a formidable political force if they just applied themselves,” said McKechnie. “I think the banking industry is still resentful for what happened back then. I know a former junior Congressional staffer who once told me that when HR 1151 passed that there was a tremendous amount of anger and real disappointment in the banking ranks, because they never thought they would lose. But in the end, I think (that attitude) is what lost the fight