Since the start of the credit crisis, banks and thrifts have lost billions of dollars because of bad loans and problematic investments. The mortgage market turmoil has also contributed to considerable volatility on Wall Street and filtered into other economic sectors, from student loans to municipal borrowing. Most recently, this turbulence has resulted in a government takeover of Fannie Mae and Freddie Mac.

In contrast to most other participants in the financial marketplace, credit unions have provided an important beacon of light and stability during the last year. In fact, credit union mortgage delinquencies stood at just 0.7% at the end of the first quarter, well below the national averages of other lenders. The credit union movement can attribute this success to its cooperative philosophy, which generally has and continues to produce sound lending practices and secure financial institutions.

By their very design, publicly traded financial institutions often fail to make their customers' interests their first priority. Instead, to maximize the gains for stockholders or increase the compensation of their executives, for-profit lenders might underwrite riskier loans or pursue potentially troubling business strategies. The current mortgage crisis has caused many to reconsider this business model.

The cooperative nature of credit unions has so far helped them to avoid significant problems in the current financial turmoil. With a model where members look out for each other, credit unions have generally maintained stable capital bases. They have also worked to continue to offer lower rates on loans, higher rates on savings and fewer servicing fees.

Leaders in the Congress recognize the benefits of the cooperative credit union system. We have therefore worked on a bipartisan basis to better regulate credit unions, improve their efficiency and enhance their services.

More than a decade ago, the U.S. Supreme Court issued a ruling that would have severely limited the freedom of individuals to join a credit union. Congress, however, took swift action to fix this problem. The Credit Union Membership Access Act of 1998--which I jointly introduced and worked to enact--has permitted consumers to continue to join credit unions.

As a result of the enactment of this law, the size of the credit union movement has grown by about 15 million members during the last decade. The financial services marketplace, however, has dramatically changed. To respond to these developments and allow credit unions to better serve their members, the Congress needs to act once again.

Since 2003, I have worked to advance the bipartisan Credit Union Regulatory Improvements Act, otherwise known as CURIA. This bill would improve the ability of credit unions to manage their risks, promote economic growth and satisfy their members' financial needs. In each Congress since its introduction, support for CURIA has grown, and we now have 150 cosponsors.

In order to strengthen the beacon of light provided by credit unions in the financial services world during these turbulent times, we have advanced some of CURIA's goals in recent months. At my request, this past March, the House Financial Services Committee held the first hearing focusing exclusively on credit union issues in nearly four years. Moreover, I worked to introduce H.R. 6312, the Credit Union, Bank and Thrift Regulatory Relief Act, which the House passed by a unanimous voice vote in late June.

Like CURIA, CUBTRRA aims to expand the ability of credit unions to promote economic development, underwrite more member business loans and assist underserved communities. CUBTRRA also provides thrifts with greater lending flexibility and allows financial institutions to pay interest on business checking accounts.

Without question, CUBTRRA is the most significant piece of credit union legislation approved in the House during the last decade. Further reforms, however, are still needed, and I remain committed to enacting all of CURIA's provisions into law.

The swift passage of CUBTRRA in the House also proved an obvious but often forgotten political rule. Namely, we can best achieve success by obtaining cooperation and compromise from all parties interested in the legislative process. Finding a workable compromise between credit unions and banks going forward is therefore essential to passing comprehensive credit union regulatory reform like all of the provisions found in CURIA.

The ongoing storm in our mortgage markets has forced many financial institutions to scale back their activities, temporarily halt lending or even fold. Credit unions, armed with a cooperative philosophy that puts members' interests first, have so far weathered the turbulence very well.

In short, credit unions have provided a beacon of financial security by which individuals can navigate through this period of market volatility. The stability provided by credit unions during this financial hurricane will only help to increase support for, and ultimately ensure the enactment of, CURIA when the waters recede.

Rep. Paul E. Kanjorski (D-Pa.) serves as chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises. He can be reached at 202-225-6511 or [email protected]