House Panel Oks Credit Union Bill

A House panel on Thursday overwhelmingly approved a measure that would overturn a Supreme Court ruling favoring banks over credit unions.

The compromise measure, adopted on a voice vote by the House Banking Committee, would subject credit unions to fair-lending requirements similar to those imposed on banks. The bill now goes to the full House.

It also contains a big bonus for banks: They would earn interest on cash reserves kept at the Federal Reserve to meet legal requirements. That could mean hundreds of millions of dollars in new revenue.

The main purpose of the legislation is to reverse the high court’s decision late last month by letting federal credit unions continue to include more than one group in their memberships, within certain limits.

The legislation “is a winner for everyone,” said Rep. John LaFalce of New York, the committee’s senior Democrat. “It is a winner for the credit unions when viewed in terms of the potential impact of the Supreme Court decision. It’s a winner for banks. … And, most of all, it’s a winner for America’s consumers.”