January 15, 1999

CONTACT:
Mark Wolff
(202) 682-4200

FOR IMMEDIATE RELEASE

WASHINGTON--The Credit Union National Association (CUNA) is filing court papers today arguing a new lawsuit brought by the American Bankers Association is without merit and a blatant attempt to block consumers from joining not-for-profit credit unions.

The ABA suit seeks to freeze the federal policy that allows credit unions to serve more than one membership group. The policy, adopted last month by the National Credit Union Administration, implements the Credit Union Membership Access Act (H.R.1151) that Congress passed overwhelmingly and the President signed into law in August.

CUNA's brief emphasizes the NCUA's rules are fully consistent with the new law. "The NCUA has respected the limits Congress set," the brief states. "It has not ignored them as the ABA complaint erroneously alleges, and it has exercised the discretion Congress gave it in a responsible manner fully consistent with the letter and spirit of the Act."

CUNA also points out the ABA criticized the credit union law as too broad before it was passed, but now claims it is too narrow. "The ABA will say anything to pursue its crusade against credit unions and limit competition," said CUNA General Counsel Eric Richard. "It first told Congress that H.R. 1151 created virtually limitless credit union fields of membership. Now the ABA tells the court that the very same language was meant to limit credit union expansion, with only the narrowest of exceptions. Which ABA is to be believed?"

CUNA's brief also refutes the legitimacy of ABA's preliminary injunction request, which would prevent NCUA from approving future expansions and declare those approved since the membership policy took effect Jan. 1 to be null and void.

"The harm that credit unions would suffer from the issuance of an injunction far outweighs any harm that banks would suffer from not having one," said Richard. "Since the ABA actually said it would sue long before NCUA had issued any rules under H.R. 1151, it is clear that the ABA's real goal here is harassment and intimidation."

CUNA urges the court to view the litigation in context, noting this lawsuit is the 20th field-of-membership case filed by the ABA and related organizations around the country. "This lawsuit is just the banking industry's latest step in a longstanding campaign to use the courts to create a climate of uncertainty for credit unions," Richard said.

CUNA is coordinating its strategy with the National Association of Federal Credit Unions (NAFCU) to ensure that all possible arguments are raised before the court.

[Read the brief and attachment.]

With its network of affiliated state credit union leagues, CUNA represents America's 11,500 credit unions -- which in turn are owned by more than 74 million consumers. Credit unions are not-for-profit cooperatives providing affordable financial services to people from all walks of life.