How quickly he forgot.
Newt Gingrich was once crucial to helping credit unions pass a major bill on Capitol Hill. But during a recent GOP presidential debate, he seemed confused about what credit unions are all about.
In 1998, while much of the country was focused on President Clinton’s definition of the word “is” and Gingrich led an effort to impeach him, credit unions faced a struggle for survival.
The U.S. Supreme Court had struck down a regulation that had permitted credit unions to expand their field of membership. Only an act of Congress would prevent what then-CUNA President Dan Mica called a “potential Hiroshima” for the industry.
And at the time there was no more important ally in Congress than Gingrich, who was in his fourth, and what would turn out to be final, year as speaker. He spoke at the time about possibly running for president but never did so until this campaign circle, long after many thought his electoral politics career was finished.
Little did he know that credit unions would make a cameo appearance during his current quest for the White House.
But first came HR 1151.
In February 1998, the U.S. Supreme Court ruled 5-4 that employer-sponsored credit unions couldn’t expand their membership to unaffiliated businesses. It struck down a 1982 NCUA regulation. The case was First National Bank and Trust Co. vs. NCUA. The case challenged the activities of AT&T Family FCU of Winston-Salem, N.C., now known as Truliant FCU.
After the decision, credit unions and their allies on Capitol Hill got to work. Although members of the leadership don’t often co-sponsor legislation, Gingrich co-sponsored HR 1151, the Credit Union Membership Access Act.
The measure gave credit unions broad authority to expand their membership. The bill, which was strongly opposed by the banking community, limited the new community charters for credit unions to well-defined local communities. It also gave NCUA the power to define what such a community is and what constitutes an immediate family member for purposes of membership eligibility.
Gingrich lobbied his colleagues hard behind the scenes.
“He was invaluable to getting it passed, though much of it wasn’t visible,” recalled John McKechnie, who was CUNA’s top lobbyist at the time.
Credit unions had mixed results on specific amendments.
In the House, then-Financial Services Committee Chairman Jim Leach (R-Iowa) cast the deciding vote to kill an amendment that would have banned credit unions from making business loans. The banks did attain one key victory, the measure included a limit on member business loans to 12.25% of assets.
In the Senate, then-Banking Committee Chairman Alfonse D’Amato (R-N.Y.) cast the deciding vote to kill an amendment that would have forced credit unions to comply with the Community Reinvestment Act.
The Senate passed the measure 92-6 on July 28 and the House passed it 411-8 on Aug. 1. Clinton signed it on Aug. 7.
Fast forward 11 years, when Gingrich was being criticized by fellow GOP presidential candidates for taking $1.6 million in consulting fees from mortgage buyer Freddie Mac, a government-sponsored enterprise.
"When you look for examples at electric membership co-ops, and you look at credit unions, there are a lot of government-sponsored enterprises that are awfully important and do an awfully good job,” he said in a Dec. 16 debate in Sioux City, Iowa.
Several industry officials pointed out that Gingrich was wrong.
A more objective source, The Tampa Bay Times fact-checking column, Politifact, concluded that it could find no support for Gingrich’s claim.
To reinforce its point, it gave the claim a grade of “pants on fire.”